1. Bulk Raw Materials Presented By: Prashant Raghavan Commercial Department, GHCL Ahmedabad

2. INTRODUCTION  GHCL Limited, a prime Soda Ash manufacturing unit, has a current production capacity of 8.5 Lacs Tons, one third of the nation’s installed capacity and intends to expand to 11 Lacs Tons.  60% of variable cost is due to bulk raw materials.  Major challenge in expansion of Soda Ash capacity is sourcing of raw materials.

3. INDEX 1 Bulk Raw Materials in Soda Ash Industry 2 Raw Materials Occurrence / Manufacturing Process 3 Procurement quantities and location 4 Challenges & Way Ahead

4. ‘DRY LIMING’ SODA ASH PROCESS The AKZO Nobel "Dry-liming" Soda Ash process is in principle based on the well-known (Solvay) ammonia process. The ammonia soda ash process is based on the principle of dissolving CO2 in an ammoniated brine (NaCl solution), which results in the precipitation of bicarbonates. The precipitated bicarbonates are separated from the brine and transformed into soda ash by calcination. The AKZO "Dry- liming" process uses the burnt lime directly in the distillation, while the classical process makes first milk of lime. In this way the heat of hydration of the lime is completely used for disengaging the ammonia. This results in considerable lower steam consumption for the ammonia recovery. The soda ash is produced from the raw materials salt (brine) and limestone, according to the overall equation: 2 NaCl + CaCO3 = Na2CO3 + CaCl2

5. ‘DRY LIMING’ SODA ASH FLOW CHART Brine NaCl & H2O Ammoniated Brine Ammonia NH3 Limestone CaCO3 Lime Kiln CaCO3 = CaO + CO2 Carbonation Tower NaCl (aq) + NH3 + CO2 + H2O = NaHCO3 (s) + NH4Cl (aq) Filter Heat Product Na2CO3 Soda Ash Ammonia Recovery Ca(OH)2 + 2NH4Cl = CaCl2 + 2H20 + 2NH3 By-Product CaCl2 Lime Slaker CaO + H20 = Ca(OH)2 NH3 NH4Cl Ca(OH)2 CO2 H2O CaO CO2

6. INTRODUCTION Major Raw materials used for manufacture of Soda Ash is Salt, Limestone and Fuel. 1.Salt - Common salt or halite (NaCI) occurs in massive, granular, compact, and crystalline forms. It contains 40 % sodium and 60 % chloride by weight. 2.Limestone - Chemical grade limestone with silica content not more than 2-3% is essentially required. Higher silica containing limestone gives considerable trouble in limekiln operation due to formation of lumps and clinkers. Higher % of carbonate is preferred for low consumption of limestone per ton of Soda Ash. Limestone required for burning in limekiln should be of uniform size between 20 – 120 mm. Limestone smaller than 20 mm tend to over burn and limestone over 120 mm remains unburnt in limekiln. 3.Fuel (Lignite / Coal / Coke) - Soda Ash process requires large amount of steam and power. Fuel in burnt in boiler to generate steam which is used to produce power in Turbo Generator.

7. QUANTITIES (In Lac MT) ItemSourcesExisting Capacity Post - Expansion Salt Captive 7.00 Purchase 6.5013.00 Total 13.5020.00 Limestone Captive 6.007.00 Purchase 8.0015.00 Import 1.50 Total 15.5022.00 CoalPurchase 2.503.50 Lignite Captive 1.752.50 Purchase 0.501.00 Total 2.253.50

8. SALT

9. SALT IONS IN SEA WATER

10. SALT HARVESTING SEA WATER Solar Evaporation (8.5 °Bu) Solar Evaporation (24.5 °Bu) Solar Evaporation (27 °Bu) Salt Washing / Ionization Recycle Clear Liquor By-Product GYPSUM Vacuum Salt / Caustic Potash Bromine / Mg(OH)2, Double Salt Salt Manufacturing is a process where sweet water is separated from sea water Liquor

11. SALT - STATISTICS In ‘000 MT Country20102011 China6275065000 United States4330044000 India1860022100 Germany1910020000 Australia1196813000 Canada1053711000 Pakistan11000 Chile84009000 Mexico84318800 France61006000 United Kingdom5800 Other Countries5847061900 World total (rounded)2,80,0002,90,000 Quantities in Lacs MT State 2009- 10 2010- 11 2011- 12 2012- 13 Gujarat179145170194 TN24212324 Rajasthan30142218 Others76610 Total240186221246 UseQuantity (In Lacs MT) 2009- 10 2010- 11 2011- 12 2012- 13 Edible56.4260.3459.6659.07 Ind.100.58107.58112.88114.38 Export28.9538.6737.7150.03 Total185.95206.59210.25223.48

12. SALT - SOURCING SrDescription 2013-14 ACaptive (Amreli Dist.) 50% BPurchase50% 1Maliya50% 2Bhavnagar5% 3Rajula20% 4Jamnagar25% TOTAL100% Sr Type2013-14 1Organized Sector25% 2 Small Scale Manufacturer 20% 3Traders40% 4Yard / Hub15% TOTAL100%

13. SALT

15. SALT – CHALLENGES & WAY AHEAD  Major Challenges are: 1.Non-availability of Govt. wasteland for salt cultivation. 2.Salt production or yield is depended on weather conditions. 3.Salt production will further reduce due to development of SEZ’s / Ports along costal regions (eg. KPT land issue). 4.Captive - Present yield in existing leases is average 60-70 MT / Annum per Acre which is below industry standards.  In view of Soda Ash expansion, there is immediate need to enhance present salt capacities or acquire new salt farms.

16. SALT – CHALLENGES & WAY AHEAD SrDescriptionActivities 1 Development of new salt fields. We have already applied for salt lease at Jamnagar, Bhavnagar and Kutch Dist. Indentified more than 1 lac Acres of land and applied for approx. 25000 Acres 2 1 Million MT stock before Monsoon. Planning to maintain 1 Million MT salt stock before monsoon (Plant + Captive + Hub of Purchase Salt) over a period of 2 to 3 years. 3 Book & shift quantities from small scale manufacturers Hub Development in Maliya, Rajula and Jamnagar. Unwashed salt to be procured and washed at hub (natural or artificial). 4 Technological improvements Partnership with CSMCRI / Technical Institutes to increase yield or introduction of new technology or extract new products from bittern.

17. LIMESTONE Limestone is a sedimentary rock, made up mostly of the mineral calcite, a form of calcium carbonate, CaCO3.Limestone The calcium carbonate is originally produced by living animals (such as shellfish). Later, much of it goes into solution in sea water, and then is deposited as limestone. Calcium carbonate gets precipitated when the physical condition of the water changes. For example, if the concentration of CaCO3 is high, then a temperature drop, or a pH (acidity) change, can cause precipitation.

18. GUJARAT – Mineral Map MineralIn Mn TDistricts Basemetal9Banaskantha Bauxite105Kutch, Jamnagar Bentonite105Kutch, Bhavnagar, Sabarkantha Calcite0.84Sabarkantha Chalk58Junagadh, Rajkot Chinaclay163Kutch, Banaskantha, Mahesana, Sabarkantha Dolomite720Bhavnagar, Vadodara Fluorite11.6Vadodara Fireclay155Surendranagar, Sabarkantha, Rajkot Gypsum24Kutch, Jamnagar Lignite1072Bharuch, Kutch, Bhavnagar, Surat Limestone11860Amreli, Kutchh, Kheda, Jamnagar, Junagadh, Panchmahals, Banaskantha, Bhavnagar, Sabarkantha Quartz4Panchmahals, Vadodara Siderite5Kutch, Bhavnagar Marble96Panchmahals, Banaskantha, Vadodara Oil418Ahmedabad, Mahesana, Bharuch, Surat, Vadodara, Kheda Coal63000Mahesana Graphite2Panchamahal, Vadodara Mang. Ore3Panchamahal, Vadodara Nepheline1Janagadh, Vadodara, Syenite Woolstonite3Banaskantha Granite1645Banaskantha, Sabarkantha, Vadodara, Panchmahal

19. LIMESTONE SOURCING SrDescriptionSource / Region 2013-14 ACaptiveLocal40% BPurchase50% 1Local regionSutrapada & surrounding 40% 2Gadu Region20% 3New AreasPorbandar20% 4SizerBoulders20% CImportOman10% TOTAL100%

20. LIMESTONE SOURCING

21. LIMESTONE – CHALLENGES & WAY AHEAD  Major challenges are: Present reserves in existing leases is only 11 Million MT which is sufficient for only 5-6 years. Non-availability of land for mining. Govt. rules and regulation, Env. Clearance etc. Due to prolonged mining, chemical grade limestone available on the surface has reduced.  In view of Soda Ash expansion, there is immediate need to enhance present limestone capacities or acquire new capacities

22. LIMESTONE – CHALLENGES & WAY AHEAD SrDescriptionActivities 1 Sourcing from new / virgin areas 1.Porbandar, Jamnagar and Rajasthan being explored. 2.Good quality limestone being procured from these areas. 3.Limestone from Dump Permits 2Imported LimestoneTo acquire limestone mines in Middle East or Africa. 3New Mining Leases 1.Expedite all lease applications. Dedicated team for the same. 2.Private land acquisition for mining (To overcome hurdles like Env. Clearance & other Govt. regulations) 4 ZERO undersize in incoming. Limestone (Inventory of only sized material) 1.Procurement policy to be changed. Zero undersize from both Captive & Purchase. 2.Screening at site and not at Plant. 5Hub Development 1.Hub development at areas like Porbandar, Gadu etc. 2.Sizing and screening using Sizer. 3.Stocking material during peak period and shift to plant during lean period, ie. Monsoon.

23. FUEL ItemSourcesExisting Capacity Post - Expansion CoalPurchase 2.503.50 Lignite Captive 1.752.50 Purchase 0.501.00 Total 2.253.50

24. FUEL – CHALLENGES & WAY AHEAD –Coal 1.Coal is being imported from Indonesia and South Africa which is subjected to frequent price fluctuations due to global demand – supply imbalances and Rupee v/s Dollar movement. –Lignite 1.The estimated reserves in Gujarat are 2722 Million MT which is GMDC controlled. 2.Lignite blocks in India are allocated to State run corporations. Only one block is allocated to Private sector, ie. GHCL Ltd. Our lignite block reserve at Bhavnagar Dist. is just sufficient to meet demand for the next 6 to 7 years (ie. 3 Million MT). 3.There is huge demand-supply gap coupled with poor quality of lignite in Kutch and Bhavnagar region (i.e. Low GCV & high Sulphur respectively). Present allocation is only 14000 MT per month during dry seasons.

25. FUEL

26. FUEL – CHALLENGES & WAY AHEAD SrDescriptionActivities LIGNITE 1 More quantities from Purchase sources Long term agreement with GMDC Ltd. which controls lignite reserves in Gujarat. COAL 1 Acquire new Coal / blocks Work needs to be done on, 1.Acquisition of coal mines at Chhattisgarh, India. 2.Acquisition of coal mines at Indonesia or Africa (Mozambique and South Africa)

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