Homegrown Tata Steel has partnered with Australia-based BHP to jointly explore low carbon 'iron and steelmaking' technology. The partnership aims to help both companies progress toward their climate change goals, and support India's ambitions to be carbon-neutral by 2070, the domestic steel major said on Wednesday.
Tata Steel has signed a memorandum of understanding with BHP, a leading global resources company, with the intention to jointly study and explore low carbon 'iron and steelmaking' technology, it said in a statement.
Under the partnership, Tata Steel and BHP intend to collaborate on ways to reduce the emission intensity of the blast furnace steel route, via two priority areas the use of biomass as a source of energy and the application of carbon capture and utilization (CCU) in steel production.
The new technology is to reduce the emission intensity of integrated steel mills by up to 30 per cent.
More importantly, these projects demonstrate how abatements applied to the blast furnace iron-making process, which contributes to more than 60 per cent of India's steel production, can materially reduce the carbon intensity of the existing capacity.
Rajiv Mukherjee, Vice President, Group Strategic Procurement, Tata Steel, said: "We believe strategic collaborations are vital in paving the way for innovations to accelerate the deployment of breakthrough technologies at scale and therefore this partnership with BHP is an important step for us".
According to a ministry document, the iron and steel industry globally accounts for around 8 per cent of total carbon dioxide (CO2) emissions on an annual basis, whereas in India, it contributes 12 per cent to the total CO2 emissions.
Thus, the Indian steel industry needs to reduce its emissions substantially in view of the commitments made at the COP26 climate change conference. Tata Steel has planned capital expenditure (capex) of Rs 12,000 crore on its India and Europe operations during the current financial year, the company's Chief Executive Officer T V Narendran said. The domestic steel major plans to invest Rs 8,500 crore in India and Rs 3,500 crore on the company's operations in Europe, Narendran, who is also the Managing Director (MD) of Tata Steel, told PTI in an interview.
On Tata Steel's CAPEX plans for FY23, he said: "We have planned for about Rs 12,000 crore of capex for the year of which about Rs 8,500 crore will be spent in India and the balance in Europe." In India, the focus will be on the Kalinganagar project expansion and mining activity, and in Europe, it will be focussed on sustenance, product mix enrichment and environment-related capex, Narendran said. The company is in process of expanding capacity of its plant in Kalinganagar, Odisha to 8 MT from 3 MT.
In addition to this, Tata Steel will be spending about Rs 12,000 crore on inorganic growth in India in the NINL acquisition, he said.
Tata Steel through its wholly-owned subsidiary Tata Steel Long Products Limited (TSLP), completed the acquisition of Odisha-based one Million Tonne Per Annum (MTPA) steel mill NINL for a consideration amount of Rs 12,000 crore.
Elaborating on the European business, he said it has been divided into the Dutch business and the British business.
"This allows us to run Tata Steel as one integrated company with five major sites, three in India and two in Europe. This brings greater focus on each of our operating sites. The European sites have been tasked with becoming self-sufficient," he said.
On Tata Steel's interest in acquiring state-owned Rashtriya Ispat Nigam Limited (RINL), he said the company did not have a dedicated large site to produce long products in its portfolio. However, the NINL acquisition has plugged this gap.
On the duty-related measures taken by the government, Narendran said "I fully understand and appreciate the compulsions of the government in taking actions that they did to control inflation. However, in the medium to long-term, we should actively be positioning India as one of the best places to produce steel in the world." Narendran, who is also part of the Executive Committee of the apex steel body World Steel Association said the Russia-Ukraine conflict has impacted the global geopolitical order and the global economic order and hence the steel industry in multiple ways.
The pandemic had already encouraged companies to look not just at cost efficiencies in supply chains but also to build resilience in supply chains.
"On the supply side input costs like cost of coal and cost of gas have been significantly impacted by the war. Russia and Ukraine together used to export about 30 to 40 million tonnes of steel into the global markets and that supply has also got disrupted. Inflationary pressures arising out of the war have disrupted plans for government infrastructure spending across the world," he said.
On the outlook for the steel sector, the industry veteran said the first half of the financial year was disrupted due to the fallout of the Russia-Ukraine war, the COVID-related shutdowns in China, and the imposition of export duty on steel in India.
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