Iron and steel industry and the major plants

Detail

1. Why iron and steel is a "basic industry"

• Basic industry means an industry whose products are used to make the goods of other industries. Iron and steel is the main example.
• All heavy, medium and light industries depend on it for their machinery.

• Railways, ships, cars, bridges, buildings, tools and farm equipment are all made from steel.

• Steel as an index of development: how much steel a country makes and uses shows how developed it is.

• India's per capita steel consumption (the steel used per person in a year) rose from 60.8 kg in 2014-15 to 86.7 kg in 2022-23, a rise of about 43% [8].
• This is still far below the world average, so there is a lot of room for steel demand to grow.

2. Raw materials and the logic of location

• Inputs: iron ore, coking coal and limestone in a ratio of about 4:2:1.
• Coking coal is coal that softens and then forms hard, porous coke when it is heated without air. Coke is the fuel in the blast furnace. It also takes oxygen away from the iron ore.
• Limestone is the flux. It joins with the impurities and forms slag, which floats on the molten iron and is removed.

• Manganese is added to make the steel harder.

• Weight-losing, heavy industry:

• Both the raw materials and the finished steel are heavy and bulky.
• So transport cost is a large part of the total cost.

• Plants are therefore built where transport costs are lowest. This is near ore or coal, at a point between them, or at a port.

• Process in an integrated plant (step by step):

• Ore, coke and limestone are fed into a blast furnace, which produces pig iron (molten iron).
• Pig iron goes to a converter or furnace, where extra carbon and impurities are removed. The result is steel.

• The steel is cast, then rolled into sheets, rods, rails and other shapes.

• Integrated steel plant: a large plant that does every stage at one site, from raw material to finished steel.

• Mini steel plant: a smaller unit that uses electric furnaces to melt steel scrap and sponge iron.

3. Why the Chota Nagpur plateau has the most plants

• The Chota Nagpur plateau covers Jharkhand and nearby parts of Odisha, West Bengal and Chhattisgarh. It has the largest concentration of iron and steel plants in India because:
• Cheap, high-grade iron ore is found here, for example in the Noamundi–Gua belt (Singhbhum, Jharkhand) and the Keonjhar–Sundargarh–Mayurbhanj belt (Odisha).
• Coking coal is close by in the Damodar valley coalfields (Jharia, Bokaro, Raniganj).
• Ore and coal are near each other, so trains can carry ore one way and coal the other. Wagons do not have to travel back empty.
• There is plenty of cheap labour.

• There is a large home market in the Kolkata–Hooghly industrial region and the rest of the Ganga plain.

• Map exercise: lay the maps of iron ore, manganese and coal over the map of steel plants. Most plants will fall on or between the ore and coal belts.

4. Major integrated steel plants

Plant	State	Year / helped by	Location and raw materials
TISCO, Jamshedpur	Jharkhand	1907; private (Tata)	Confluence of the Subarnarekha and Kharkai rivers; ore from Noamundi, coal from Jharia; near the Kolkata–Mumbai rail line
IISCO, Burnpur	West Bengal	SAIL	Near Asansol in the Damodar valley; coal from Raniganj–Jharia
Visvesvaraya Iron and Steel, Bhadravati	Karnataka	1923	On the Bhadra river; first used charcoal from nearby forests, because there was no coal nearby; ore from the Baba Budan hills (Kemmangundi)
Bhilai	Chhattisgarh	SAIL; USSR	Ore from Dalli-Rajhara; coal from Korba
Rourkela	Odisha	SAIL; West Germany	Sundargarh district; ore from the Sundargarh–Keonjhar belt
Durgapur	West Bengal	SAIL; UK	Damodar valley; coal from Raniganj–Jharia
Bokaro	Jharkhand	SAIL; USSR	Damodar valley; coal from Jharia–Bokaro
RINL, Visakhapatnam	Andhra Pradesh	Public sector	First shore-based (coastal) integrated plant; uses imported coking coal that arrives by sea; ore from Bailadila (Chhattisgarh)
JSW Vijayanagar	Karnataka	Private	Toranagallu, Ballari district; close to the Ballari–Hosapete ore belt

• Bhilai, Rourkela and Durgapur were set up with foreign help during the Second Five Year Plan (1956-61), when the plan focused on heavy industry.
• SAIL (Steel Authority of India Ltd): the public sector company that runs Bhilai, Rourkela, Durgapur, Bokaro, Burnpur (IISCO), Salem and Bhadravati.
• Salem (Tamil Nadu): SAIL's plant for special steels, mainly stainless steel.

5. Where new capacity is coming up

• Ore belt (Odisha–Jharkhand–Chhattisgarh):
• Kalinganagar (Jajpur district, Odisha; Tata Steel)
• Angul (Odisha)
• Jharsuguda (Odisha)

• These sites are next to large ore deposits and the Talcher–Ib Valley coalfields.

• Coast: plants are also being built near ports, because they depend on imported coking coal. Examples are Visakhapatnam and the ports of Odisha.

• Secondary sector: this means steel made in electric arc furnaces (EAF) and induction furnaces, mostly from scrap and sponge iron.
• Secondary plants, including MSMEs, had 94.42 MT of the 200.3 MT capacity in 2024-25.

• MSMEs alone held about 47% of crude steel capacity [2].

• Sponge iron, also called direct reduced iron (DRI), is iron made from ore in solid form, without melting it.

• India has been the world's largest producer of sponge iron since 2003 [7][8].
• Most DRI units are coal-based and sit in the mineral-rich states.

6. Production, rank and targets

• India became the world's second-largest crude steel producer in 2018, after China [7].
• India's share of world crude steel output rose from 5.2% (2014) to 7.9% (2024) [8].
• Capacity and production:

Year	Crude steel capacity	Crude steel production
2023-24	179.51 MT	144.30 MT
2024-25	200.33 MT	152.18 MT

Source: Joint Plant Committee data [2].

• National Steel Policy (NSP) 2017 targets 300 MT of crude steel capacity and 255 MT of production by 2030-31 [3].

7. Green steel

• Green steel: steel made with very low greenhouse gas emissions. It is made using hydrogen or renewable electricity in place of coal.
• Normal route: coke from coal removes oxygen from the ore in a blast furnace, and this releases a lot of CO₂.
• Green route: hydrogen removes the oxygen in a DRI unit, and this releases water vapour instead of CO₂.

• The DRI is then melted in an electric arc furnace that runs on renewable power.

• Green Steel Taxonomy (a taxonomy is an official classification system):

• Released on 12 December 2024 by the Ministry of Steel [4].
• Green steel is steel from plants that emit less than 2.2 tonnes of CO₂-equivalent per tonne of finished steel (tCO₂e/tfs) [4].
• Steel is graded by star rating:

Rating	Emission intensity (tCO₂e per tonne of finished steel)
Five-star	below 1.6
Four-star	1.6 to 2.0
Three-star	2.0 to 2.2

• The count covers Scope 1 emissions (from the plant itself), Scope 2 emissions (from the electricity it buys) and some Scope 3 emissions (from earlier steps such as beneficiation and agglomeration of ore) [4].
• The limits will be reviewed every three years [4].

8. The weak link: coking coal

• India has large coal reserves, but only a small part is coking coal. Most of that has high ash, low vitrinite and poor coking quality [6].
• About 85-95% of the steel sector's coking coal is imported. The exact share differs by year and by estimate [5][6].
• Mission Coking Coal was launched by the Ministry of Coal in 2021-22.
• Its aim is 140 MT of raw coking coal output by 2030.

• After washing, this would give about 48 MT of usable coking coal [5].

• This dependence explains two things:

• why new plants are built at the coast, close to the ports where imported coal arrives;
• why DRI–EAF and hydrogen routes, which need less coking coal, are being promoted.

Prelims Hooks

• TISCO (1907), Jamshedpur: at the confluence of the Subarnarekha and Kharkai; ore from Noamundi, coal from Jharia.
• Foreign help: Bhilai and Bokaro – USSR; Rourkela – West Germany; Durgapur – UK.
• Bhilai gets its ore from Dalli-Rajhara; it is in Chhattisgarh, not Jharkhand. This is a common trap.
• Visakhapatnam (RINL) is India's first shore-based integrated plant. It uses imported coking coal.
• Bhadravati (1923, Karnataka) at first used charcoal, not coke.
• Salem (Tamil Nadu) makes special and stainless steels. JSW Vijayanagar is at Toranagallu, Ballari (Karnataka).
• Raw material ratio: iron ore : coking coal : limestone = 4:2:1. Manganese is added for hardness.
• India has been the 2nd largest crude steel producer since 2018 and the largest sponge iron producer since 2003.
• Green Steel Taxonomy (December 2024): limit of < 2.2 tCO₂e/tfs; five-star means < 1.6.
• NSP 2017: 300 MT capacity and 255 MT production by 2030-31. Capacity in 2024-25 was 200.33 MT.

Mains Points

• Location pattern (GS-I): the early plants grew on the Chota Nagpur plateau (ore and coal close together, rail links, the Kolkata market). Plants then spread into the ore belt (Bhilai, Rourkela, Kalinganagar), to the coast (Visakhapatnam, port-based plants) and to scrap and power-based mini plants. This shows that plants follow raw materials first, then follow ports when raw materials are imported.
• Planning and the state (GS-I/III): in the Second Five Year Plan, foreign-aided public sector plants (SAIL) were placed in backward, mineral-rich areas to start regional growth. Later, liberalisation brought private, export-oriented plants (JSW, Tata Kalinganagar). Today MSMEs hold about 47% of capacity.
• Raw material security (GS-III): the dependence on imported coking coal (85-95%) is the weak link. Responses include Mission Coking Coal, washing of domestic coal, DRI–EAF routes and coastal location. Gaps remain: domestic coal quality and port logistics.
• Decarbonisation (GS-III): steel is one of the most carbon-intensive industries. The Green Steel Taxonomy (2024) creates a market signal by star-rating steel. Its success depends on the cost of green hydrogen, renewable power and scrap. It also helps exporters meet carbon border taxes, such as the EU's CBAM (Carbon Border Adjustment Mechanism).