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NLC, NMDC to sign MoU with Australian firm for steel production

M. Ramesh | | Updated on: May 23, 2018
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PSUs will invest₹150 cr, access cutting-edge tech

In a few days, SK Acharya, Chairman and Managing Director of the public sector lignite mining-cum-power production company NLC, will fly to Australia to sign an agreement with Environmental Clean Technologies Ltd (ECT), an Australian company. The agreement will effectively lay the foundation for NLC to enter into steel production in a few years.

The agreement is unique in two ways. First, it is for setting up a joint venture between an Australian private sector company (whose biggest asset is technology for using lignite for making steel) and two Indian PSUs, NLC and NMDC. The Australian company will hold 49 per cent in the JV, and the two Indian PSUs will equally own the rest.

The entire ₹150 crore will be brought in equally by NLC and NMDC. ECT will bring technology to the table. The JV will own the IP for all regions except Australia, where ECT will have exclusive rights.

Second, as a consequence of the agreement, the JV will set up a ₹150-crore pilot project at Neyveli to try out a new technology, used only once ever, by ECT for a small test-plant in Australia. This effectively makes it the biggest PPP-mode R&D project, which will result in Indian companies securing cutting-edge technology.

Matmor technology

At the heart of the project is a process that replaces costly coking coal with cheap lignite. “Steel is an alloy based primarily on iron. As iron occurs only as iron oxides in the earth’s crust, the ores must be converted, or ‘reduced’, using carbon. The primary source of this carbon is coking coal,” notes an explainer from the World Coal Association.

ECT says its Matmor technology “is the world’s first and only lignite-based primary iron making technology, capable of replacing metallurgical coal and high-grade lump iron ore with lower-cost alternative raw materials.”

It says the process is based on a “unique pathway that utilises hydrogen, enabling lower operating temperatures and shorter process times than the traditional blast furnace route.”

Today, high-grade coal costs about $100 a tonne, and coking coal twice as much. In contrast, lignite costs $30. NLC has an abundance of the mineral.

Pilot plant

The pilot plant is to be commission-ready by December 2019, and the more significant phase begins after that: making steel. The agreement, which will be signed on May 30 in Canberra, provides for the framework to proceed with a commercial-scale, integrated steel-making facility, for which land has been identified at Neyveli.

A capacity of 500,000 tonnes of steel has been indicated. And, after the successful outcome of the R&D project, the joint venture will license its technology to steel-makers all over the world.

Published on May 23, 2018

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