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"Mining companies need to earn a social license to operate and make the industry sustainable"
In conversation with Sustainability Outlook, Mr. Rajeev Singhal, Vice President (Raw Materials), Tata Steel shares his thoughts on raw materials sustainability in the Indian steel industry and the steps needed to be done to make the industry sustainable as well as competitive globally
What are the major challenges in terms of raw material sustainability in the Iron & Steel sector?
The global steel industry is estimated to use around 2 billion tons of iron ore, 1 billion tons of metallurgical coal and 520 million tons of recycled steel for the production of 1.6 billion tons of crude steel every year. As such, raw material sustainability forms the crux of sustainability in the Iron and Steel Industry.
For sustainable business, the major challenges faced by the mining companies are ensuring workforce safety, maximizing mine productivity, addressing environmental concerns, recruiting and retaining skilled workforce, and acquiring and developing new mining blocks. There has to be a joint effort by all the stakeholders – the Miners, the Government and the Regulators - to address these challenges. The introduction of new technologies would increase the safety and productivity of the workforce. Alternate modes of transports, like slurry pipelines, would reduce environmental impact and improve safety. Adoption of new technologies in beneficiation will lead to sustainable mining.
Another area which requires attention is the of high mining tax rates in India. The effective tax rate for operating iron ore mines in India is nearly 64%, which is the highest in the world, with the closest being Indonesia at around 45%, while Australia is around 40%. The difference in tax makes our products uncompetitive and unattractive.
Considering that minerals are the backbone of industrial development and our country is blessed abundant natural resources, it is important that we evolve a mining policy through dialogue and participation of all the stakeholders that could address these challenges. Increased exploration would enhance resource base in the country and would also help in offering new blocks to the miners.
What has been driving change in the sector in terms of mining raw materials safely and sustainably?
Issues of safety, loss of biodiversity, erosion and deforestation are the factors that should usher changes in mining Industry. In view of the need to further develop and manage mineral assets in a sustainable manner, the guidelines and work practices should be further developed and adhered to by the industry so that biodiversity and supporting ecological and sociological processes are not compromised.
What is Tata Steel's long term strategy regarding sustainable raw material abstraction?
The impetus to improve our sustainability credentials comes from the top. Our board and senior management firmly believe that a ‘sustainable’ approach improves financial performance and creates additional shareholder value. Tata Steel has over the years addressed all issues of environment and safety with complete commitment and utmost priority. We have been certified as per the highest international standards and as a company we ensure raw material efficiency and conservation through advanced technologies in beneficiation and mechanised mining.
What are the major initiatives that have been taken to ensure sustainable mining?
Tata Steel adopts advanced scientific mining technologies and ensures conservation of minerals. Innovative ore beneficiation and extraction techniques are used to ensure minimum waste. At Joda, the Company has set up a computerized Central Mine Planning Cell and Sukinda Chromite Mine in Odisha is the first mine in the world to be certified under SA 8000 Quality Management System and is also certified under Environment Management System (ISO 14001:2014) apart from a host of other standards and certifications.
Under energy conservation initiatives, Tata Steel‘s coal mines in West Bokaro generate the majority of their power needs from coal rejects. The Company has installed solar lights and LED lights to reduce electricity consumption. Townships are also equipped with solar power lamps in the streets which lights the lanes and by-lanes. Now the solar lights are also going to be installed in adjoining villages. A 3 MW solar power plant project has been initiated at Noamundi and the day may not be far when even our mines are fuelled in part via alternative sources of energy.
Tata Steel is an active member of various industry committees and associations across the globe, including World Steel Association (Worldsteel), Confederation of Indian Industr (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), and Federation of Indian Mineral Industries (FIMI). The Company pursues various collaborative initiatives with these industry associations to ensure sustainable mining. To provide further impetus towards sustainable mining, Tata Steel has entered into an agreement with IUCN (International Union for Conservation of Nature) to monitor the activity of Biodiversity management at our mines.
As the country pushes to achieve the steel production capacity of 300MT by 2030-31, what steps would you suggest to make the sector sustainable?
Availability of raw materials at competitive rates is imperative for the growth of the steel industry. The Indian National Steel Policy - 2017 observes that the steel sector is disadvantaged due to limited availability of essential raw materials such as high grade lumpy Manganese ore & Chromite, coking coal, steel grade limestone, refractory raw material, Nickel etc.
The government has already amended the Mines and Minerals (Development and Regulation) Act, to bring clarity on mine allocation process (through auction), procedure for mining lease renewal, reservation of any particular mine for a particular end use, greater emphasis on time-bound mine development and increased stress on mineral exploration & sustainable mining operations.
Extensive exploration will help in augmenting our resource base. Government has already taken steps in this regard with the implementation of NMET (National Mineral Exploration Trust).
The conservation of resources through utilization of low grade hematite iron ore fines via strengthening of beneficiation and agglomeration industries needs to be a focus area. The transportation of iron ore fines to pelletisation plants through slurry pipelines and conveyors will reduce pollution and decongest transportation infrastructure. Also, the development of economically viable technologies to use magnetite ore will enable the industry to remain competitive by using domestic rather than imported raw material.
Coking coal is a key requirement for producing steel through the blast furnace route. Currently, India imports most of its coking coal requirement. Steel grade coal should not be supplied to power plants and investment in washeries will increase availability of Coking coal. Additionally, research and commercialisation of dry beneficiation of coal will make the industry eco-friendly.
It will also be good to promote usage of thermal coal or natural gas to produce Sponge Iron / Direct Reduced Iron (DRI) which will reduce coking coal requirement in India. The government’s policy on commercial mining of thermal coal will increase availability of thermal coal for non-power sector like steel industry.
In conclusion, mining companies should be aware of the need to change the negative perspectives of stakeholders and earn a social license to operate and make the industry sustainable .