Indian Institute of Metals Delhi Chapter

SAIL- Strategy 2020

Resurgent India Vision 2020 in Metals & Minerals Sector

Rakesh Kulshreshtha
Executive Director I/C
[Corporate Planning]

CONTENT OF THE PRESENTATION

JOINT VENTURES / STRATEGIC ALLIANCES MODERNIZATION & EXPANSION

OUR VISION FOR THE FUTURE

CORE STRATEGY

SAIL A BRIEF DESCRIPTION

AN INTRODUCTION ABOUT SAIL

SAIL - LARGEST STEEL PRODUCER IN INDIA

FY2012 saleable steel production of 12.40 MT
Identified modernisation and expansion plan expanding capacity to 20.23MTPA of saleable steel by FY2013.

Second largest iron ore mining operations in India One of only five PSEs in India accorded Maharatna status

FY2012 turnover of over Rs. 50,000 crores

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...WITH ...WITH AN ESTABLISHED AND SUCCESSFUL OPERATING TRACK RECORD RECORD... ...
Over 50 years of experience in the steel sector

...AND ...AND STRATEGICALLY LOCATED OPERATIONS

Manufacturing Facilities Plant Current capacity (MTPA) Planned FY12 Installed Production Capacity (MT) (MT)*
Total Current Saleable Steel Capacity FY12 Saleable Steel Production Total Saleable Steel Capacity Post Expansion 11.20 MTPA 12.40 MT 20.23 MTPA

Integrated Steel Plants Bhilai Steel Plant Durgapur Steel Plant Rourkela Steel Plant Bokaro Steel Plant IISCO Steel Plant Special Steel Plants Salem Steel Plant Alloy Steels Plant Visvesvaraya Iron & Steel Plant Total 0.18 0.18 0.1 11.2 0.31 0.19 0.06 12.38 0.34 0.43 0.22 20.23 3.15 1.59 1.67 3.78 0.55 4.24 1.84 2.07 3.35 0.32 6.56 2.12 3.99 4.18 2.39

Note: Capacity numbers refer to saleable steel capacity * After implementation of Modernisation & Expansion Plan

FULLY INTEGRATED PRODUCER WITH STRATEGICALLY LOCATED OPERATIONS... OPERATIONS...

Five integrated steel plants and three special steel plants located principally in eastern and southern India Easy and cost efficient access to raw materials Ready supply of substantial portion of raw materials

...AND ...AND ACCESS TO LARGE RESOURCE BASE

Access to large captive raw material base
Second largest mining operations in India in FY10 99.9% iron requirement in FY10 met through captive supplies Plans to ramp up existing mines to meet post expansion requirements 41% of dolomite and 38% of limestone requirements in FY10 met through captive soruces Developing new coking coal mines at Tasra and Sitanala

Large land bank Relative selfsufficiency in power

Sizeable land bank provides flexibility for expansion and growth at existing locations Owns and operates four captive power plants (aggregate cap. of 211 MW) 50% interest in four captive power plants (aggregate cap. of 1,116 MW) Approximately 70% of FY12 power requirement sourced through captive sources

Large skilled manpower base

106,000 full-time employees including over 15,000 executives Reducing employee cost/tonne expanded capacity planned to be operated with the current number of employees Emphasis on skill based training to remain competitive 8

DIVERSIFIED PRODUCT MIX SUPPORTED BY STRONG DISTRIBUTION AND SALES NETWORK

Sales Breakup by Products

Pipes 0.5% Semis 10.9% Rods / bars 16.7% Coated products 2.0% Plates 20.6% CR coils / sheets 6.7% Structurals 7.1% Railway materials 7.3%

HR coils / sheets 28.2%

Vision
To be a respected world-class corporation and the leader in Indian steel business in quality, productivity, profitability and customer satisfaction

Credo
We build lasting relationships with customers based on trust and mutual benefit. We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactive to change. We chart a challenging career for employees with opportunities for advancement and rewards. We value the opportunity and responsibility to make a meaningful difference in people's lives.

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SAILs LONG TERM STRATEGY FOR GROWTH

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SAIL strategically continues to be an integrated steel producer, producing steel by the BF-BOF-CC route. Critical to its competitiveness and sustainability is access to key raw materials iron ore and coking coal. Strengths of SAIL is its captive iron ore mines near the steel plants. In India, there are rich and sufficient endowments of iron ore and non-coking coal. Choice of technology to use indigenous raw-materials.

Raw-material and resources supply businesses Upstream

Supporting Businesses Diversification in related businesses

SAILs Core Business Steel Downstream End Use Industries Business

Supporting Businesses

Diversification in related businesses

Other Related Businesses

Railway track expansion & up gradation projects Metro rail / light rail urban transportation projects Logistics solutions Production of rolling stock (wagons, coaches etc) Waste Management Engineering Workshops Prefabricated structures in steel Brand exploitation in related businesses Manufacturing of equipment & machinery Power generation & transmission (incl. Renewable Energy]

MODERNISATION & EXPANSION PLAN

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MODERNISATION & EXPANSION PLAN

Capacity build-up as per current expansion plan envisages :
(Million tonnes)

Particulars Hot metal Crude Steel Saleable Steel

Installed Capacity 13.82 12.84 11.07

After Current Phase 23.46 21.40 20.23

MODERNISATION & EXPANSION PLAN: SALEM

Production Build-up
million tonnes

Installed cap. Crude Steel Saleable Steel 0.18

After Expn 0.18 0.34

Major Facilities
New Steel Melting Shop (180,000 tpa) tpa) New Cold Rolling Mill Complex (146,000 tpa) tpa) Up Up-gradation of Existing Cold Rolling Mill Roll grinder for Hot Rolling Mill

MODERNISATION ERNISATION & EXPANSION PLAN: IISCO

Production BuildBuild-up
Installed cap. Hot Metal Crude Steel Saleable Steel 0.85 0.50 0.40
million tonnes

After Expn 2.91 2.50 2.39

Major Facilities
Coke Oven Battery (0.78 million tonnes), tonnes), Sinter Plant (3.8 million tonnes) tonnes ) Blast Furnace (4060 m3) with Top Pr Pr. . Recovery Turbine (2.7 million tonnes) tonnes ) Basic Oxygen Furnace (BOF) Shop (2.56 million tonnes tonnes) ) Billet Caster (1.67 million tonnes) tonnes) and Beam Blank/ Bloom Caster (0.8 million tonnes tonnes) ) Heavy Section Mill (0.6 million tonnes tonnes), ), Wire Rod & Bar Mill (1.25 million tonnes)

MODERNISATION & EXPANSION PLAN : BHILAI

Production BuildBuild-up
Installed cap. Hot Metal Crude Steel Saleable Steel 4.08 3.93 3.15
million tonnes

After Expn 7.50 7.00 6.56

Major Facilities Coke Oven BatteryBattery-11 (7 m tall); 2nd Sinter M/c in SPSP-3 Blast Furnace (4060 m3) Steel Melting Shop III (4.0 million tonnes tonnes) ) New Casters Bar & Rod Mill (0.9 mt mt), ), Universal Rail Rolling Mill (1.2 million tonnes) tonnes )

MODERNISATION & EXPANSION PLAN: ROURKELA

Production BuildBuild-up
Installed cap. Hot Metal Crude Steel Saleable Steel 2.00 1.90 1.67
million tonnes

After Expn (Mt) 4.50 4.20 3.99

Major Facilities 7m tall Coke Oven Battery, Sinter Plant (1x360 m2) Blast Furnace (4060 m3), 3rd BOF, LF, RHRH-OB Single strand slab caster New plate mill 4.3m (1.0 million tonnes tonnes) )

MODERNISATION & EXPANSION PLAN: BOKARO

Production BuildBuild-up
Installed cap. Hot Metal Crude Steel Saleable Steel 4.59 4.36 3.78
million tonnes

After Expn (Ph-I) 5.77 4.61 4.18

Major Facilities Rebuilding of COBs with Pollution Control measures Upgradation of one Blast Furnace Upgradation of existing SMS SMS-II to 3.35 million tonnes from 2.85 million tonnes New Cold Rolling Mill Complex (1.2 million tonnes tonnes) )

MODERNISATION & EXPANSION PLAN: DURGAPUR

Production BuildBuild-up
Installed cap. Hot Metal Crude Steel Saleable Steel 2.09 1.80 1.59
million tonnes

After Expn (Ph-I) 2.45 2.20 2.12

Major Facilities RMHS & Coal handling facilities; UpUp-gradation of By Product Plant, Dolomite plant, LF New slag yard Rebuilding of Coke Oven BatteryBattery-2 BloomBloom -cum round caster (0.75 million tonnes tonnes) ) Medium Structural Mill (1.0 million tonnes tonnes) )

SAIL BROWN FIELD EXPANSION TO REACH ITS ULTIMATE CAPACITY

The brownbrown-field expansion potential of the integrated steel plants has been assessed based on: on: Existing facilities Facilities under Ongoing Modernization/Expansion Plan Plan-Phase Phase-I Facilities that could come Modernization/Expansion Plan Plan-Phase Phase-II under Ongoing

Capacity Expansion Plan based on exploiting full brown brown-field capacity of integrated steel plants at their existing locations

Realization in a phased manner

JOINT VENTURES / STRATEGIC ALLIANCES

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CURRENT JOINT VENTURES / STRATEGIC ALLIANCES

FOCUS AREA ALLIANCE PARTNER OBJECTIVE JVs with NTPC and DVC for power plants for captive consumption

POWER

CEMENT

Bokaro Jaypee Cement Ltd is operating a 2.1MTPA cement plant at Bokaro Bhilai Jaypee Cement Ltd is operating a 2.2MTPA cement plant at Bhilai

SHIPPING

JV with Shipping Corporation of India for shipping of imported coking coal JV for manufacture of specialized wagons

WAGON MANUFACTURE

E-PORTAL

JV with Tata Steel to promote e-commerce activities in steel and related areas

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CURRENT JOINT VENTURES / STRATEGIC ALLIANCES

FOCUS AREA ALLIANCE PARTNER OBJECTIVE

TECHNOLOGICAL UPGRADATION

MoU with Kobe Steel to explore employment of ITmk3 single step furnace technology.

International Coal Ventures Ltd set up as JV with CIL, RINL, NMDC and NTPC to acquire coal assets globally JV with MOIL to produce ferro-manganese and silicomanganese to lower cost of steel production
RAW MATERIALS

MoU with NMDC to jointly develop limestone mine in Himachal Pradesh with expected capacity of 3MTPA S&T Mining JV with Tata Steel for acquisition and development of coal blocks/mines
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EMERGING ALTERNATIVE IRON MAKING TECHNOLOGIES

Blast furnace is the most acceptable iron making technology for mass production; offers economies of scale. Drawbacks: Energy intensive Environmental Pollution Requirement of prepared burden Emerging Alternative Iron Making Technologies No need for coke oven, sinter plants Less Capex Environmental friendly Use non coking coal, lean iron ore

SUPPLY CHAIN MANAGEMENT

Iron ore: 1. The future steel plants to use more quantities of beneficiated iron ore 2. Use of pellets and micro fines in sintering to increase Coking Coal: Reducing dependence on coking coal through following: Increasing auxiliary fuel consumption (primarily CDI) and nut coke to the extent possible. Use of higher content of semi coking and non-coking coal in the coke oven blend through use of technologies like Stamp charged batteries, etc. Introduction of alternate iron making technologies which can use non coking coal and iron ore fines.

TECHNOLOGIES TO REDUCE WATER & SPECIFIC ENERGY CONSUMPTION

Future steel plants would target zero discharge of water through extensive closed circuit cooling and through extensive dry cooling. Adoption of technologies which eliminate processes like sintering and coke making (thus reducing heating and cooling cycles) would also contribute towards reducing CO2 emissions and water consumption.

JV WITH KOBE STEEL FOR ITMK3 TECHNOLOGY

SAIL and Kobe Steel, Japan to jointly set up a 0.5 million Tonnes per annum ITmk3 technology based iron nugget plant at SAILs Alloy Steel Plant, Durgapur. Latest technology developed by Kobe Steel, Japan, to produce premium grade Iron nuggets, using low grade Iron Ore Fines and non-Coking Coal. One of the largest technologies where downstream facilities will become energy efficient. Running successfully in Minnesota Plant

ITMK3 PROCESS: PRODUCTION OF IRON NUGGETS

Disadvantage in DRI: gangue remains within it Kobe Steel, Japan: ITmk3 Ore + coal composite pellets: Reduction & melting at 1500C in RHF It produces almost low sulphur pure iron nuggets (& slag globules) 0.25 mtpy plant at Minnesota, USA

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IRON NUGGETS

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HAJIGAK DEPOSITS

BACKGROUND - HAJIGAK
The Hajigak Iron Ore Deposit is situated in the mountainous Bamyan Province, 130 kms. West of the Afghanistan Capital, Kabul. Hajigak deposit comprises of four iron-ore blocks (A,B,C & D) having estimated reserves of 1.8 bn. Tonnes of high grade Magnetite ore (62-64% Fe). Presence of coking coal & other raw material source makes it exceptionally favourable target for economic development.

HAJIGAK BIDDING
Submission of bid by Afghan Iron and Steel Company (AFISCO), a consortium of seven leading Indian steel and mining companies in India :
SAIL (Lead Consortium Member) RINL NMDC JSW JSPL JSW Ispat Limited Monnet Ispat and Energy Selected as Preferred Bidder for three blocks (B, C & D) of the Hajigak Iron ore deposits and Reserved Bidder for the block.

 SAIL led Consortium of seven (7) public and private sector companies - Preferred party for the three out of four iron ore blocks of Hajigak deposits, Afghanistan. Development of iron ore resource to its optimum capacity; Value-addition by setting up a steel manufacturing facility; Power plant; Development of Rail & Road infrastructure and CSR activities Negotiations are Government. ongoing with the Afghanistan

HAJIGAK IRON ORE DEPOSITS, AFGHANISTAN

SETTING UP OF A GREEN FIELD INTEGRATED STEEL PLANT IN SINDRI

GoI allotted land and other assets of the closed unit of FCIL

at Sindri, Jharkhand to SAIL in August11 - 5482 acre land available for the project.
To incorporate 3 JVs for setting up a steel plant, Urea Plant

at Sindri , power plant and township services.

SPV SAIL-Sindri Projects Ltd. incorporated in Nov.11 Firmed up proposal submitted to Ministry of Fertilizer. Final Clearance from BIFR awaited for initiating further

activities.
Project related activities shall commence thereafter

SAILSAIL -RITES JV PROJECT

SAIL RITES Bengal Wagon Industry Private Ltd. with 50:50 shareholding. The Wagon manufacturing plant to undertake fabrication of 1500 wagons per annum. The plant is being set up at SAIL Growth Works, Kulti and construction work is in full swing.

OTHER RAILWAY PROJECTS

Setting up a wagon components (Cast steel Bogies, Couplers and related products) manufacturing facility as a 50:50 JV with Indian Railways. The plant to be set up on the land under possession of BSCL at Jellingham, West Bengal. JV Agreement signed between SAIL & BSCL, a PSU under Ministry of Railways. Incorporation of JV under progress.

INITIATIVES IN POWER
Augmentation of power 750 MW additional Power facility planned at Bhilai and Rourkela through NSPCL Renewable Sources of Power Various State Electricity Regulatory Commissions have made mandatory (for users of Captive power) to use up to 5% of captive power from Renewable Energy Sources. (out of this 1% has to be from Solar Power). Planned to install renewable energy based power plant in JV (80 MW).

SAILS VISION FOR THE FUTURE

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SAILS VISION FOR THE FUTURE

SAIL aims to maintain its market leadership position Realizing the assessed potential in a phased manner. Greenfield opportunity e.g. Greenfield facility at Sindri, overseas opportunities Earn revenue from non-steel business where synergy exists Power strategy - To be a surplus power producer Renewable Energy [Solar & Non-Solar] Refractories & ferro-alloys Rail Transportation identified as a growth opportunity in the value chain

SAILS VISION FOR THE FUTURE

Earn revenue from non-steel business where synergy exists Waste Management Prefabricated structures in steel & cement Brand extension in related businesses Logistics Manufacturing of equipment & machinery

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