Centre's Inclusion of Refractories in PLI 2.0 Aims to Boost Steel Capacity Target to 300 MT by 2030

6 Jun 2023 , 09:24 AM

According to multiple news reports, the Centre plans to include refractories in the next Production Linked Incentive Scheme 2.0 for steel as it seeks to double the nation’s capacity to produce the metal to 300 million tonnes by 2030. India depends on the import of refractories, a crucial component in the making of steel.

According to the reports, the Ministry of Steel is now in discussions with the refractory sector to create a programme of incentives to increase domestic production and lessen the nation’s reliance on imports from China.

Refractories are extensively used and consumed by the steel industry. At the moment, the sector consumes 70% of the refractory. The goal of tripling steel production over the following 6-7 years necessitates.

According to the report, ‘consultations are underway for inclusion of refractories’ in the PLI 2.0 plan, which is anticipated to be unveiled soon.

The government granted Rs 6,322 crore under the first PLI programme to stimulate the steel industry with the goal of supporting approximately Rs 30,000 crore in investment and the addition of nearly 25 million tonne of special steel capacity over the following five years.

Refractory materials are used in the steel industry to line the internal furnaces used in the production of iron and steel.

Experts claim that even though the cost of refractory only accounts for 2–3% of the total cost of steel production, it is a crucial element without which not a single tonne of steel can be manufactured.

Anirban Dasgupta, director of the state-owned SAIL Bhilai Steel Plant, has urged for the growth of the refractory industry and cooperation with the steel sector in an effort to achieve self-sufficiency together, according to ET.

‘The refractory industry must grow in tandem, and even at conservative estimates, the consumption of refractories for steel by 2030 will be 2.5-3 million tonne,’ said Dasgupta.

To lessen the refractory industry’s reliance on a single supply of raw materials, he also suggested that India’s ‘currently missing’ magnesite be beneficiated.

According to a senior industry executive who talked to ET, the Rs 15,000 crore Chinese import and raw material sourcing market is also experiencing some difficulties.

The PLI scheme aims to increase domestic production and draw investments to specific industries. Companies that achieve specific output and investment targets will get cash incentives under the plan.

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