The eighth International Conference on Steel and Steel-making Raw materials concluded in New Delhi on February 5, 2013. Several questions were raised at the conference, such as: What is the current iron ore situation in major iron-ore producing states in the world? What are the key challenges facing the global steel industry today? How long will it be before local steelmakers are forced to import ore from abroad? When will iron ore get depleted and what would be the consequences?
In a message to the conference, Sajjan Jindal, chairman and managing director, JSW Steel, said the demand for steel, a primary player in the progress of any nation’s economy, has grown exponentially. India has emerged as the fourth largest steel producer in the world and that should make the soul of Jamshetji Tata happy. If the proposed expansion plans are implemented, India may even emerge as the second largest crude steel producer in the world. All that is very fine, but has anybody any idea about the availability of iron ore in the decades to come? When will the time come for iron ore to be depleted worldwide? And then, what will happen?
Here are some facts: Presently China produces 900 million metric tonnes (mmt), Australia 420 mmt, Brazil 370 mmt, India 260 mmt followed by Russia 100 mmt and eleven other countries.
According to Geoscience Australia, the continent has about 24 gigatonnes of 24 billion tonnes of iron ore and this is being used up at the rate of 324 million tonnes per annum. One official has been quoted as saying that “if you extrapolate that, then it’s pretty easy to see that within 30 to 50 years, the high-quality ore in Pilbara will be mined out”. Much the same thing can be said of all countries with iron ore reserves. Once exploited, the ore supply will vanish.
However, according to Thomas Price, vice president of the US-based steel company, Kaisar Steel, there are untold millions of ore in the Pilbara deposits. He is reported to have said: “I think this is one of the most massive ore bodies in the world. It is just staggering. It’s like trying to calculate how much air there is.” How long will the iron ore supply, even from such productive a deposit as Pilbara, last? What will happen if this supply is exhausted?
Currently ore is dug “on surface.” According to one expert, “if the industry can find currently untapped rich deposits below the surface, that could dramatically extend the life of a country’s iron ore reserves.” But that is just guessing.
The problem essentially is one of sustainability. According to Sam Walsh, chief executive, Iron Ore, one of the most frequent questions he is asked is: “What happens when the ore runs out?” His answer is twofold: One, new reserves may be discovered – not unlikely when billions are spent annually on exploration. Two, known, but hitherto inaccessible reserves might be exploited, thanks to advances in technology. But this is more a reflection of hope than an acceptance of reality.
In the 1960s, the world was already massively overpopulated, with a population of around 3.5 billion. It added a little less than another billion in each of the subsequent three decades. A United Nations’ estimate puts the world’s population at currently around 7 billion. The argument is that the eighth billion will take significantly longer than the seventh and the ninth much longer- possibly not until 2050. On some projections, a population of 10 billion will never be reached, considering that as people get wealthier, they are better nourished, better housed, getting better medical care and enabled to live hugely better lives. And from this is derived the hope that under such circumstances, fertility rates will plummet. That is pure speculation.
A world with some ten billion economically better-off people will demand more cars, more two-wheelers and more of everything of which steel is part, like better housing. What seems more plausible is that our industrialists do not want to face the unpalatable fact that the world over, we are over-exploiting our iron ore reserves and refuse to face the consequences. The time may come, sooner than later, when one by one, our steel factories will close down. And this suggests that India, if it wants to keep its steel production going, should not allow the export of even an ounce of iron ore. This has been going on for some time, with our politicians not realising that they are selling their motherland down the river. Iron ore is the country’s most precious mineral heritage.
China has 2,700 steel mills; of these, many are below the one million tonne capacity, and are loss-making and due to be closed down soon. India’s steel industry, however, according to Anjani K.Agarwal, partner of Ernst & Young Pvt. Ltd, is set to become a powerhouse. This is pure and simple self-delusion. The manufacture of cars the world over has crossed the one billion mark in 2010, 24 years after reaching 500 million in 1986. Prior to that, the vehicle population doubled every 10 years from 1950 to 1970, when it first reached the 250 million unit threshold.
In the United States alone 250,272,812 ‘highway’ registered vehicles were counted in 2010, (25.02 crore). As of now, China is the producer of the largest number of cars (14,485,326) or 24 per cent of world production. The ratio for other countries are: Japan (11.9 per cent), Germany (9.7 per cent), South Korea (7.0 per cent) and India (5 per cent) with the production of 3,08,332 cars. The United States follows India, with the production of 2,966,133 cars (4.9 per cent).
The question is: how long will this fabulous production last? In addition to cars, every developed nation of any standing also manufactures trucks, buses and other transport vehicles. One authority is on record as saying that production will start tapering off in some fifty years, if not earlier. By then, some hard decisions will need to be taken in regard to priority. Production of what should be curtailed: cars, trucks, trains, planes, ships, boats? Will it be necessary to stop building high-rise apartment houses?
We may be witnessing the end of a civilization as we know it. Travel will get restricted; we may get back to the bullock cart or the horse-driven cart age. Who knows, the world may indeed come to an end. Without printing presses there will be no newspapers, no books, no libraries. A world without iron will not just be a world worth living. This is a matter for another international conference on steel to ponder upon. Ducking the issue will only hasten the end of mankind. And may it be remembered, it is the GenNext that will be the first to get hurt. It is for this generation now to give thought to the future at an international level.
