A steel plant or steel mill or steel factory or steelworks is a place where steel is manufactured. India, currently ranked as the 2^nd 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.

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.

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

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

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.