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Manufacturing Industries In India: Iron And Steel Industry - Introduction

Updated on December 25, 2014

Iron and Steel Industry



Iron and Steel industry is the key element in the heavy industrial structure of a nation. It is often called the basic industry and forms the backbone of the industrial economy. Most of the important industries such as automobile, locomotives, rail tracks, shipbuilding, machine and tools and manufacture of defense equipment depend on iron and steel industry. The production and consumption of iron and steel is one of the most significant measures of the level of industrialization and economic growth of a country.

A Brief History Of Iron And Steel Industry In India

Although the technique of smelting iron ore was known to Indians since the ancient times, the first iron and steel unit on modem lines was made in India with the setting up of Bengal Iron Works at Kulti in West Bengal.

Thereafter, real foundation of the industry was laid by the pioneer of modern industry, Jamshedji Nusserwanji Tata at Jamshedpur in Bihar in 1907, with the establishment of Tata Iron and Steel Company (TISCO), now known as Tata Steel Company. It was followed by the Indian Iron and Steel Company (IISCO) at Burnpur (West Bengal) in 1919 and Mysore Iron and Steel Works at Bhadrawati (Karnataka) in 1923 which was later named as Visveswaraya Iron and Steel Works Ltd. in 1972.

Iron and Steel industry witnessed a rapid growth after Independence. The development of the industry was envisaged during the First Five-Year Plan, but it was during the Second Five-Year Plan that the three integrated steel projects were started at Bhilai, Rourkela and Durgapur in collaboration with the USSR, Germany and Great Britain respectively. Bhilai Plant was among the first to be set up in the public sector.

India is now the tenth largest producer of steel in the world and is now almost self-reliant in the requirement of steel.

Difference Between An Integrated Steel Plant And A Mini Steel Plant

An integrated steel plant is one where all the three processes from melting of iron ore in the blast furnace to steel making followed by shaping of the metal by rolling is carried out under one complex.

Mini steel plants are decentralized secondary units. They use electric arc and induction furnaces for processing. They use scrap iron and sponge iron which are easily available. They produce alloy steel, mild steel and stainless steel. They also produce liquid steel which is turned into ingots. Mostly mini steel plants-are located in the areas away from integrated plants to meet the local demand. There are 173 mini steel plants in the country and they are widely spread.

The Government of India is planning to set up some more mini-steel plants because they have several advantages:

  • They use scrap iron which is easily available in the country and is comparatively cheap.
  • They do not use heavy capital investment.
  • They do not cause pollution.
  • They produce special steel.
  • They can be set up at any convenient place as they do not need huge infrastructure.

The only disadvantage of a mini steel plant is that it is totally dependent on electric power. Secondly, they consume more power per unit weight of steel produced than the integrated steel plant. Some of the mini steel plants are located at Kanpur, Jaipur, Pune, Hyderabad, Ranchi, Delhi and Bhopal.

Iron Ore Processing In A Typical Integrated Iron And Steel Plant

The basic raw materials of iron and steel industry are iron ore and coal. Others are manganese, limestone, chromite, silica and feldspar. Manganese is used for removing impurities from steel. It also makes steel tough and hard. Chromium, nickel and tungsten are used for galvanizing steel products to make them rust-proof.

Iron ore does not exist by itself. It has to be separated from other metals to get pig iron which is the real raw material for the industry. To obtain pig iron, the ore is first melted in a blast furnace along with coke and limestone. The burning coke melts the ore and the impurities are separated. The molten ore is mixed with limestone. This is called slag. The molten iron is collected into molds and is called pig iron. This in turn is used for cast iron, wrought iron and steel depending on the percentage of carbon in each.

Steel Making

  1. The pig iron is breakable and is of little use as it has many other impurities such as carbon, manganese, silicon and phosphorus. To remove these, pig iron is melted again in a special furnace called Bessemer converter. However, this method has become obsolete. Nowadays, another method is being used, called Open Hearth Method, for the same purpose. This process is called smelting of iron ore.
  2. Steel is not made of pure iron. According to its composition, it can be divided into two types — plain carbon, steel and alloy steels. Steel is an alloy of iron and carbon, (with 1% Carbon). Special steels are produced by adding other minerals. For example, stainless steel which contains chromium and nickel. Addition of manganese makes very hard steel. Alloy and other special types of steel are used for specific purposes, for example, nuclear energy and defense equipment, space technology and railways.
  3. Finally, steel is cast into huge ingots which are rolled into various shapes and sections, for example, sheets, plates, rails, rods, channels, angles and flats. Steel wires can also be drawn in different sizes for numerous applications in a number of industries.

Problems Of Iron And Steel Industry In India

  1. Capital investment: A large-scale industry like iron and steel needs huge capital investment. It is difficult for a developing country like India. This is the reason why India has not been able to exploit its resource potential to its fullest extent.
  2. Foreign trade: Production of iron and steel falls short of our demand and India spends crores of rupees to import these items.
  3. Lack of technology: During 1960s and up to the oil crisis of 1973, Indian Iron and Steel Industry was well known for its high degree of technological efficiency, but during the following decades steep hike in energy cost and other raw materials reduced the margin of profit in steel. This resulted in lower level of investment by the government towards technological development. Consequently the industry lost its technological edge and is now far behind the advanced countries. The only solution lies in increasing the production which will improve the financial status of our country.
  4. Low productivity: The per capita labor productivity in India is at 90-100 tonnes per annum which is the lowest in the world. Comparatively, the labor productivity in Korea, Japan and other developed countries is 600-700 tonnes per man per annum. Therefore, there is an urgent need to reorganize the labour force and increase the productivity.
  5. Low potential utilization: Strikes, lockouts, energy crisis and inefficient administration results in low potential utilization.
  6. Heavy demand : Even at low per capita consumption rate, the demand for iron and steel is increasing and large quantities of iron and steel have to be imported. Therefore, production has to be increased to save the precious foreign exchange.

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© 2014 Rachit Bhargava

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    • pramodgokhale profile image


      3 years ago from Pune( India)


      After independence India built this important core industry to generate wealth and employment. India was rich in mineral deposits such ,iron, manganese, coal necessary to build stell production Nehru government promoted this industry with collaborations and built production base for other industries.We are self sufficient in technology and production

      Now private players set up their steel plants so we became third largest steel producer in the world


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