INDIA: SPONGE IRON PRODUCERS IS DITCHING COAL FROM SOUTH AFRICA FOR LESS EXPENSIVE MOZAMBIQUE ORIGIN

30 August, 2022 by
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60,000 tonnes of coal from Mozambique have been ordered by at least 10 sponge iron and secondary steel plants in Odisha and Chattisgarh. Additional fifty or so have expressed interest in researching the mineral as a South African coal's substitute, which has become more expensive and significantly demanded by European nations due to the ban on Russian supply.

The premium South African kind, often known as RB2, is 8–10 percent more expensive than coal from Mozambique. The coal, also known as VT-1 or Vulcan Thermal grade 1, is used to make sponge iron, commonly known as DRI (direct reduced iron).

"So far 60,000 tons have been booked by sponge iron mills and secondary producers of Odisha and Chattisgarh. There are 50-odd inquiries so far", stated a representative of a trading firm.

The going rate in Mozambique is about USD 220 per tonne, which is also less expensive than the going rate in South Africa, which is currently between USD 250 and 260 per tonne.

Notably, due to Indian specific mills' kiln requirements, Australian coal is not frequently preferred. 

One of the largest Indian steel firms recently experimented using VT-1 quality coal. The findings indicated that 700–800 kilogrammes of coal are typically consumed for every tonne of sponge iron, and vice versa.

Contrarily, South Africa only uses 700–800 kilogrammes of coking coal per tonne of sponge iron, compared to India's need for 1,500 kg each ton of sponge iron, which comes from Coal India.

The sponge iron industry's sluggish supply of domestic coal and the high worldwide price are two reasons why sponge iron mills have altered their purchasing habits and re now shopping for coal from Mozambique and Russia, among other places.

Due to the high worldwide price and domestic coal’s tardy delivery to the sponge iron sector, sponge iron mills have modified their purchasing habits and are seeking for Mozambique and Russia origin coal, among other places.

The materials and information on this article have been prepared or assembled by Viet Nam Steel and are intended for informational purposes only.


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