Possibilities of refractories in PLI 2.0 to reach 300 MT steel target

The Centre is set to incorporate refractories into the forthcoming Production Linked Incentive Scheme 2.0 for the steel industry, aiming to double the country's steel production capacity to 300 million tonnes by 2030, according to an official statement. Refractories play a vital role in steel manufacturing, and India currently relies on imports from China for this critical raw material. The Ministry of Steel is actively engaged in discussions with the refractory industry to devise an incentive policy that will stimulate domestic production and reduce import dependence, the official revealed.

"The steel industry is a significant consumer of refractories, accounting for 70% of its consumption. To achieve the vision of doubling steel capacity in the next 6-7 years, we need to focus on developing this key raw material," stated Abhijit Narendra, Joint Secretary at the Ministry of Steel, during a recent meeting with industry stakeholders in Kolkata. The PLI 2.0 scheme, including refractories, is expected to be announced soon, with consultations already underway, he added.

Under the initial PLI scheme, the government approved Rs 63.22 billion to invigorate the steel sector, aiming to attract around Rs 300 billion in investments and create an additional capacity of approximately 25 million tonnes of specialty steel over the next five years. Refractories are essential materials used to line internal furnaces in the production of iron and steel. While the cost of refractories represents only 2-3% of steel production, they are indispensable components without which steel production would be impossible, according to industry experts.

Anirban Dasgupta, Director of the state-run SAIL Bhilai Steel Plant, emphasised the need for expansion in the refractory industry and collaboration with the steel sector to achieve self-reliance. "To double steel production, the refractory industry must expand proportionally. Conservatively estimated, the consumption of refractories for steel will reach 2.5-3 million tonnes by 2030," Dasgupta stated. He also recommended the beneficiation of magnesite, currently lacking in India, to reduce the refractory industry's reliance on raw materials from a single source.

The refractory sector, worth Rs 150 billion, currently faces challenges in sourcing raw materials and dealing with imports from China, noted an industry official. The objective of the PLI scheme is to promote domestic manufacturing and attract investments in targeted sectors. The scheme offers financial incentives to companies that meet specific production and investment targets.