India is the world’s largest producer of sponge iron, accounting for approximately 13 per cent of the global production. Since non-coking coal is abundantly available in India, coal based sponge iron contributes about 80 per cent of the total sponge iron producing capacity in the country. Due to scarcity of coking coal for the blast furnace route, Indian coal based sponge iron production expanded over the last decade. Today, though India has 35 MTPA installed capacity for DRI, the production has come down from 24.8 MT in 2010 to 20.05 MT in 2012, 17.81 MT in 2013, 17.31 MT in 2014 and 17.87 in 2015. Leading states in sponge iron production are Odisha, Chhattisgarh, West Bengal and Jharkhand. Odisha occupies the top position accounting for 36 per cent of the total coal based sponge iron producing capacity in the country followed by Chhattisgarh (27%), West Bengal (14%) and Jharkhand (8 %).
Presently, the situation in the iron & steel industry is very bad. With the acute shortage of key raw materials – iron ore and coal, demand stagnation and stringent government policies are squeezing the iron & steel companies in India. Medium & large units can still continue to run especially those having captive iron ore and coal mines. Forward integration to steel making & rolling along with co-gen module did give some stability to these units but at present, they are all struggling to survive !