India has emerged as the largest sponge iron producer in the world? How long can it retain this position?
India is the largest producer in the world with 18 per cent of world production. It has been the largest producer for the last three years and our production is one million tonne higher than any other country. There are four major producers in the world (India, Venezuela, Mexico and Iran) accounting for 60 per cent of the global production. The way we are growing no other country is growing, so in the next seven to eight years we will remain the largest producer. 
What is the current rate of growth?
The domestic average growth rate has been 21 per cent in the last three years while the global growth rate stands at 10 per cent. And the major growth is in the coal-based sector as gas is in short supply. 
What is the future outlook for the industry?
Sponge iron will play a key role in the development of steel sector as per national steel policy. The industry is very well placed to meet the fast growing demand of metallics. Sponge iron is the substitute for steel melting scrap. Scrap availability is getting difficult and the coking coal reserves are limited. So steel industry has to depend heavily on sponge iron for the supply of metallics in future. 
We have an installed capacity of 170 lakh tonne at present. And there are at least 160 more plants in various stages, from planning to implementation. So we expect that the installed capacity will go to 3 million tonne in the next five years. Existing sponge iron manufacturers are going in for expansion in addition to large number of greenfield projects which are in the pipeline. 
The number of small plants in this segment is very high. How do they survive?
They have their local approach. Small players supply to induction furnaces in their area. Many players are putting up their own induction furnaces as forward integration. They go even a step forward and set up rolling mills. For sponge iron in future to survive they must have forward or backward integration. Backward is expensive, therefore, people will go for forward integration.
What is the reason for mushrooming of mini sponge iron plants?
A 60,000 tonne-a-year plant without power generation will cost Rs 24 to 25 crore and a small plant of 50 tonne-per-day will cost Rs 5 to 6 crore. It is a small investment and that is why people are going in for small plants. The margins are also reasonably good. They are able to maintain prices but not quality. There is no process control and pollution is a main concern as most of them go for coal-based plants and not gas, which is a clean fuel but which costs more and availability poor. Ninety per cent of the world production is gas-based. Out of the 10 per cent coal-based plants, India accounts for 78 per cent. 
How much of a shift has occurred in the industry towards sponge from scrap?
The sponge-scarp mix depends upon the availability and price of scrap. Most manufacturers use 70 per cent sponge and 30 per cent scrap. If a few ships land in Kandla scrap availability goes up and the ratio can go up to 50:50.
Who are the major users of sponge iron?
We cater to electric arc furnaces and induction furnaces. Gas-based plants cater to alloy steel makers and steel plants as they need better quality. Some of the steel plants have started using sponge iron in blast furnace also to cut down the use of scrap or coking coal. This has given a further boost to the demand of sponge iron.
What are the major problems confronting sponge iron manufacturers?
Our biggest problem is the availability of critical raw materials, iron ore and coal. Gas availability is very difficult. There has been an unprecedented rise in iron ore prices in the last three years. We want export of all high-grade iron ore banned and mining leases be made available to private sector so that prices can come down to a realistic level. We hope the government will accept the recommendations of the R.K. Dang committee on iron ore policy.
What is the current demand-supply situation?
The demand-supply scene is pretty comfortable. Major power cuts in states like Uttar Pradesh and Punjab is affecting operation of induction furnaces which has brought down the demand and prices along with it. This is a temporary phenomenon, but we expect the demand to pick up and prices also to pick up in the near future. The sponge iron industry looks forward to improvement in the supply of raw materials together with better infrastructure facilities to meet the fast growing demand of the steel industry.