Environmental Clearance

EC Legalities Applicable On Foundries in the Metallurgical Sector

calendar12 Apr, 2023
timeReading Time: 5 Minutes
EC Legalities Applicable On Foundries in the Metallurgical Sector

Metals are crucial to other manufacturing sectors like engineering, electrical and electronics, automobile and automobile components, packaging and infrastructure. The performance of the metallurgical industry is a reflection of the overall economy. India’s metallurgical industries are very crucial to the country’s economic development. This sector produces 95 minerals, 4 fuel-related minerals, 10 metallic minerals, 23 non-metallic minerals, 3 atomic minerals and 55 minor minerals, including building and other types of minerals. Sustained growth is therefore expected to be seen across all key segments, including the foundry sector. However, the Metallurgical industries have the potential to cause damage to the terrestrial and aquatic environment. Therefore, legalities applicable on foundries include environmental clearance for setting up any primary metallurgical process under category A. However, in the case of secondary metallurgical units, the project will be appraised at the state level as Category B projects under section 3 (a) Metallurgical Industry. Also, in the case of the secondary metallurgical industry, those projects involving the operation of a furnace only, such as induction and electric arc furnace, submerged arc furnace and cupola with a capacity of more than 30,000 TPA, would require environmental clearance.

Categorisation Used in Indian Metallurgical Industry

If there are more than one way of extracting a metal from its ore or mineral, then the process which gives a purer form of metal will belong to the category of primary metallurgy, while the others fall into the secondary metallurgy category. e.g. in the case of iron making, the blast furnace process is a primary metallurgical process, whereas other processes of iron making, i.e., sponge iron or HBI making, will belong to the category of secondary metallurgy. Secondary metallurgical processes start with the output of the ore reduction process, scrap, salvage and ingots as input to the industry. Its products are semi-finished and finished products. It includes melting, giving the aimed shape to the final output, forming, pouring liquid metal and alloys into the mould cavity, and forging. The processes and input materials used for the production of metals like sponge iron, foundries, re-rolling mills, mini-blast furnace (MBF) based steel plants, electric arc furnace (EAF) and induction furnaces, aluminium, lead, copper, zinc, and ferroalloys.

Legalities Applicable On Foundries in the Indian Metallurgical Industry

Foundries are facilities that produce metal castings and offer casting-related services. They are categorised under the orange category of Industries as ‘industry or processes involving foundry operations’. These foundries perform all sorts of metallurgical activities ranging from patternmaking, moulding, melting, pouring, ejection, cleaning, fettling, and inspection. If a proposed activity falls under Sector 3(a) (Metallurgical Industries- ferrous and non-ferrous under the EIA Notification of 2006[1]), the unit will need an environment clearance under the respective category it falls under category A or B.

Government Initiatives for the Development of Foundries

The 2022-23 Union Budget shows the step the government has taken as planned to help this sector. The followings are the initiatives and measures undertaken by the government of India in this regard

  • The last Budget announced that coking coal and anthracite will be exempted from import duty, which the duty was 5%. Also, import duty on metallurgical coke was reduced to zero from 5% earlier.
  • Apart from exempting duty on fuel sources, the government also withdrew customs duty on stainless steel, flat products and high steel bars.
  • The Budget also extended the Emergency credit line Guarantee Scheme for small and medium-scale industries up to March 2023. It expanded the guaranteed cover by 50,000 crores to cover an amount of 5,00,000 crores. It also restructured the Credit Guarantee Trust for Micro and Small Enterprise Scheme to facilitate an additional credit of 2 lakh crore for improving employment opportunities.

Environment Clearance Legalities Applicable On Foundries

In iron foundries, harmful substances are evolved in cupola furnaces, the places where the cast iron is poured into moulds, and where the mould and cores are dried. In steel foundries, harmful substances are mainly evolved in the electric furnaces for melting the steel, during the preparation of the moulds, when extracting the casting from the moulds and cleaning them.

Environment Clearance Legalities Applicable On Foundries

After identifying the site and carrying out a pre-feasibility study, the next legalities applicable on foundries includes application for the prior environmental clearance using Form 1 given in Annexure III. The proponent has to submit the filled-in Form 1 along with the pre-feasibility report and draft ToR for EIA studies to the concerned authority i.e. MoEF, Government of India for Category A projects and the SEIAA in case of Category B projects

Siting Legalities Applicable On Foundries

Areas that must be preferably avoided include

  • Ecologically and/or otherwise sensitive areas: Preferably 5 km; depending on the geoclimatic conditions, the requisite distance may be decided appropriately by the agency.
  • Coastal Areas: Preferably ½ km away from the high tide line (HTL).
  • Flood Plain of the Riverine System: Preferably ½ km away from flood plain or modified flood plain affected by dams in the upstream or flood control systems.
  • ̇Transport/Communication System: Preferably ½ km away from highway and railway line.
  • Major Settlements (3,00,000 population)
  • Critically polluted areas are identified by MoEF from time-to-time

Screening Stage

This stage is applicable only for Category ‘B’ developmental activity, i.e., if general conditions are applicable for a Category B project, then it will be treated as a category A project. Besides, screening also refers to classifying Category B projects into either Category B1 or Category B2. Category B1 projects require to follow all stages applicable for a Category A project but is processed at the SEIAA/UTEIAA. Category B2 projects, on the other hand, require neither EIA nor public consultation.

Scoping Stage

The project proponent shall submit the application to the concerned authority. The application (Form 1 as given in Annexure III) shall be attached with the pre-feasibility report and proposed ToR for EIA Studies.

Terms of Reference

ToR for EIA studies in respect of the metallurgical industry (ferrous and non-ferrous) must include an Executive summary of the project – giving a prima facie idea of the objectives of the proposal, use of resources, justification, etc. In addition, it should provide a compilation of the EIA report, including EMP and post-project monitoring plan in brief.

Structure of EIA Report

  • Introduction
  • Project Description
  • Description of the Environment
  • Anticipated Environmental Impacts & Mitigation Measures
  • Analysis of Alternatives (Technology & Site)
  • Environmental Monitoring Program
  • Additional Studies (Public consultation, risk assessment, social impact assessment, R&R action plans)
  • Project Benefits
  • Environmental Cost Benefit Analysis
  • EMP
  • Summary & Conclusion (This will constitute the summary of the EIA Report)
  • Disclosure of Consultants engaged

Issues with the Indian Foundry Sector

Foundries are known to create air pollution and soil degradation in the form of burnt sand and slag. That is why the establishment of foundries becomes a challenging task in many parts of the country. However, with the guidance of experts who have experience in assisting in the legalities applicable on foundries can make the setup process hassle-free. Some of the significant issues that need consideration are

  • Use of Old and Obsolete technologies
  • Use of Polluting Fuel
  • Lack of Air Pollution Control Devices
  • Lack of mechanism to manage waste

Market Overview and Scope of Foundries in India

As per some reports, there are about 5000 foundries in the country. They are mostly located in the form of clusters in the country, and these clusters specialise in the specific needs of the market. For instance, the foundry castings in Belgaum and Kolhapur are famous for automotive castings, while the diesel engine castings of Rajkot are known throughout the country.

As per the data released by the Foundry Information Centre (FIC), the total production of castings in India stood at 11.31 million tonnes, and the major market is occupied by the casting of automobile parts (32 %), followed by sanitary casting (8%), Pipeline fittings (8 %) railway valves (5 %) and pumps and compressors (5%).

Conclusion

The legalities applicable on foundries are depend on the type of metallurgical operations in the foundry. However, with the current demand of metal in the economy, the market is bound to rise. The scope of foundries in India will also be aided by several factors, such as growing domestic demand, investment in capacity addition, increasing supply deficit in other countries and favourable government regulations. This is a lucrative opportunity for those who want to venture into this business. However, the applicable licencing and compliances associated with the business can be hectic and time-consuming and, therefore, will need the assistance of experts and consultants who speed up the entire process.

Read Our Article: Environment Clearance (EC) For Thermal Power Plants

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