To increase the usage of available raw materials, the Ministry of Steel has directed integrated steel players to make use of iron ore fines in steel making after its beneficiation.
As per sources, it has also suggested that players look at options like acquiring coking coal mines abroad.
“This is aimed at increasing the availability of raw materials at competitive prices, they said.
"It has been conveyed to them that iron reserves are limited in the country and to preserve that, players must also use low grade ore through beneficiation process. They can also look for coking coal mines outside India," the sources said.
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Iron ore and coking coal are the two key raw materials used for manufacturing steel through blast furnace route. While iron ore is available in abundance, for coking coal, India remains heavily dependent on imports.
Major players use only high-grade ore (lumps), with 65 per cent and above iron content, to make steel through BF (blast furnace). Fines are low-grade ore having iron content of 64 per cent or less.
Beneficiation of low grade ore adds to the overall cost of production.