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    A steel plant or steel mill or steel factory or steelworks is a place where steel is manufactured. India, currently ranked as the 2nd largest producer of crude steel in the world (after China), has several prominent integrated and mini steel plants. There are two types of steel plants in India, and this article will discuss the difference between integrated vs mini steel plants.

    Put simply:

    • An integrated steel plant is involved in the entire steel production process
    • A mini steel plant is involved in producing mild or semi-finished casting products and alloy steel

    Let’s understand the meaning of integrated and mini steel plants, difference between integrated vs mini steel plants, what problems does the steel industry face, and the importance of the co-existence of integrated and mini steel plants.

    Which is the first integrated steel plant in India?

    Rourkela Steel Plant, in Rourkela (Odisha), set up in the 1960s, is the first integrated steel plant in India. At present it is operated by the Steel Authority of India (SAIL). Set up with foreign collaboration (i.e., West Germany), it was initially named as Hindustan Steel Limited.

    What is an integrated steel plant?

    To understand, how are integrated steel plants different from mini steel plants, let us first look at the meaning of an integrated steel plant.

    An integrated steel plant is one in which all the processes involved in steel making are done in one place. It is usually huge in size and employ a large workforce to carry out the complete steel manufacturing process from iron ore to the finished product (e.g., TMT, angle, steel channels, coils, plates, etc).

    Some of the primary functions carried out in integrated steel mills are:

    • Iron making
    • Steelmaking
    • Casting
    • Roughing rolling / billet rolling
    • Product rolling

    At present, there are 10 primary integrated steel plants in India, with TISCO (Tata Iron and Steel Company) and SAIL (Steel Authority of India Limited) as the largest companies in the private and public sectors respectively.

    Which states are integrated steel plants (ISPs) located?

    The main states in India with integrated steel mills are:

    • Jharkhand – TISCO, Bokaro Steel Plant
    • Odisha – Rourkela Steel Plant
    • West Bengal – Durgapur Steel Plant, IISCO Steel Plant
    • Chhattisgarh – Bhilai Steel Plant
    • Maharashtra – Chandrapur Ferro Alloy Plant
    • Gujarat – ArcelorMittal Nippon Steel India Ltd. (Essar Steel)
    • Karnataka – Visvesvaraya Iron and Steel Plant, JSW steel plant (originally JISCO)
    • Tamil Nadu – Salem Steel Plant
    • Andhra Pradesh – Vizag Steel (Rashtriya Ispat Nigam Limited – RINL)

    What are mini steel plants?

    Mini steel plants are secondary steel producers. They are smaller steel factories/mills that use induction or electric arc furnace (EAF) for melting iron. They usually use pig iron, sponge iron and steel/ferrous scrap as raw material and produce mild steel and alloy steel (mainly stainless steel).

    Compared to setting up integrated steel plants, mini steel mills are less capital intensive and easier to build with shorter gestation periods.

    In India, there are approximately 650 mini steel plants located conveniently across regions to meet the local demand for steel.

    Examples of mini steel plants in India are: Andhra Steel Corporation (Andhra Pradesh) and Mukund Iron and Steel Company (Maharashtra).

    How are integrated steel plants different from mini steel plants?

    As can be understood, there are some prominent differences between integrated steel plants and mini steel plants with respect to its scope, cost, purpose, and other criteria. Let us take a closer look at how integrated and mini steel plants differ.

    Differences between integrated vs mini steel plant


    Integrated steel plant

    Mini steel plant

    Purpose Large steel mills undertaking end-to-end primary production of steel, from raw materials to the finished product Small steel factories undertaking secondary production of steel from pig iron, sponge iron and steel/ferrous scrap to make mild steel and steel alloys
    Method/Process Blast furnace using coking coal (as energy) for smelting iron, steel making, casting, roughing rolling and billet rolling, shaping Electric arc furnace or industrial furnace to melt scrap (conserving coking coal), i.e., electricity for melting iron
    Location Concentrated in areas with high-grade reserves of iron ore and coal, and access to affordable labour (i.e., in India it is the Chota Nagpur plateau) Closer to consumer markets in industrial areas, catering to local and regional demand for steel
    Capacity 100,000 – 6 lakh tonne/yr (contributes to almost 60% of India’s steel production) 50,000 – 5 lakh tonne/yr (contributes to almost 40% of India’s steel production)
    Investment/Cost estimator Huge capital investment required, approximately ₹15,000 – ₹20,000 per tonne of steel, with fixed charges on interest and depreciation Lesser capital investment required, approximately ₹250 -500 crore for a 100k capacity steel mini mill
    End product TMT bars, steel channels and angles, steel coils, steel plates Mild and alloy steel as per specifications


    What are the problems faced by integrated and mini steel plants?

    The steel sector in India has witnessed an upward growth trend in the last few years. The government too has implemented policies and initiatives to drive the growth of steel to reach the goal of India becoming a 300 MT steel producer by 2030 (or sooner).

    That being said, there are several challenges in steel supply chain and other areas such as raw material availability, access to skilled and affordable labour, economical transportation services, technology adoption in steel production and more.

    Some of the common problems faced by the steel sector, namely the integrated and mini steel plants are:

    • Access to coking coal – Most of the coking coal used in steel production is imported (mainly from Australia) that increases the overall cost of production.
    • Availability of affordable skilled labour – Though labour is available in India, it is mainly unskilled or semi-skilled labour.
    • Lack of technology adoption – New technology adoption requires monetary investments and workforce skill development, both of which are not readily available.
    • Rising cost of logistics services – Steel metal production requires iron ore and coking coal which has to be transported from their place of origin. Moreover, steel metal is used across different industries (e.g., steel in automotive sector, in building construction, in shipbuilding, in pharmaceuticals etc.) and needs to be transported to its destination of consumption, adding to the overall cost.
    • Irregular power supply and insufficient infrastructure support – Lack of proper infrastructure often leads to higher operational costs for steel production in plants. For instance, a few years back mini steel plants in the Chhattisgarh industrial area faced challenges in getting electricity supply at nominal rates. This led many mini steel mills to consider closing down due to losses from operational costs. (Source: TOI, Aug 2016)

    What are the advantages and disadvantages of integrated and mini steel plants?

    As can be understood, mini steel plants and integrated steel plants have their contribution to the steel sector in India. Let us take a look at the pros and cons of integrated and mini steel mills in India.

    Advantages/Disadvantages of integrated steel plants and mini steel plants


    Integrated steel plants

    Mini steel plants

    • One unit to undertake diverse requirements for steel production
    • Huge production capacity to produce steel
    • Capital to invest
    • Economical to setup
    • Usually built in industrial towns close to consumer markets to cater to local demand
    • Input material e.g., pig iron, scrap iron, etc. easily available and economical
    • Causes less pollution and environmental damage as it uses electric furnace for steel production
    • Transportation cost is reduced as production is usually for regional markets
    • Expensive to set up and requires to be built in areas with large reserves of required raw material
    • Poor infrastructure support
    • Inadequate energy supply
    • Lack of funds for technology adoption and to scale
    • Insufficient skilled labour

    The way forward for integrated and mini steel plants in India

    Steel production in India has risen over the years. Changes in government policies, e.g., the amendment to export duties have enabled the sector to conquer several of its previous challenges. Though some of the challenges e.g., environmental issues, there are solutions that are being worked out, e.g., recycling of steel, waste management etc.

    What’s important is for steel mill owners to understand technology and use it adequately to find balance. Technology adoption can solve some of the regular operational challenges. Similarly, businesses requiring steel as a raw material should considering looking for new and smart ways of procuring steel for their business.

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    Sohini Banerjee

    Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.