In a first, Tata Steel ventures into steel scrap recycling

Tata Steel is setting up India's first scrap recycling plant, which will be based in Rohtak, Haryana. The move will give the company an early lead among peers as scrap generation increases in the Indian economy, which is also the fastest growing steel market in the world.

Being set up on BOO (built, own and operate) model, the unit will have a capacity of five lakh tonne a year. To implement and run the plant, Tata Steel has entered into a long-term BOO agreement with Aarti Green Tech, a unit of the Ludiana-based Aarti Steels.

"In preparing for the future, Tata Steel has set up a steel recycling business to meet the growing demand for steel in a sustainable manner in the long run," said TV Narendran, CEO & MD, Tata Steel.

"The steel recycling business will help formalise the scrap market in India and help the country transition to a scrap-based steel making route in the long-term," he added.

The company is investing Rs 150 crore in the venture and expects to commercially start producing in the second half of the present fiscal.

There are further plans to set up similar units across the country.

Despite the domestic market's growing stature in the world steel market, it still lags -- like it does in the per capita consumption parameter -- in generation of steel scrap and its usage.

At present, the annual demand for steel scrap in India is 30 million tonne, with five million tonne imported every year. Automobile, construction and ship-breaking industries are the largest generators of steel scrap.

On the other hand, the world's largest steelmaker ArcelorMittal alone recycles 30 million tonne of steel a year. It is sure to bring this capability to India, if it succeeds in its pursuit for Essar Steel, which is facing insolvency proceeding.

That is why the initiative of Tata Steel, now the second largest steelmaker in India after JSW Steel, will help.

The Indian scrap industry is highly fragmented and unorganised, and availability of clean scrap is low. Most operations are manual and lack of safety and environment standards, make the operations risky to life and health.

Tata Steel plans to use digital platforms and channel networks to collect scrap from various segments such as households, and end of life vehicles. This scrap will be processed through mechanised equipment and used as an input raw material for downstream steel making through the Electric Arc Furnace route.

This route of steel making uses scrap as a key input and reduces carbon emissions by up to 60 percent. That is an important detail for an industry that has been under the spot for being one of the largest emitter of carbon in the world.

"Steel is 100 percent recyclable material and can be used repeatedly to create new steel products, without losing the inherent properties of steel. This helps reduce the use of natural resources as well as leads to low CO2 emissions," said Narendran.