BFCL is a producer of Direct-reduced iron (DRI), also called sponge iron, which is formed by diect reduction of iron ore (in the form of lumps, pellets or fines) by coal in rotary kiln.

Reduced iron derives its name from the chemical change that iron ore undergoes when it is heated in a furnace at high temperatures in the presence of hydrocarbon-rich gases, carbon monoxide or elementary carbon. Direct reduction refers to processes which reduce iron oxides to metallic iron at temperatures below the melting point of iron. The product of such solid state processes are called direct reduced iron. The reducing gas is a mixture of gases, primarily hydrogen (H2) and carbon monoxide (CO). The process temperature is typically 800 to 1200 °C.

Direct reduction processes can be divided roughly into two categories, gas-based, and coal-based. In both cases, the objective of the process is to drive off the oxygen contained in various forms of iron ore (sized ore, concentrates, pellets, mill scale, furnace dust etc.), in order to convert the ore, without melting it (below 1200 °C), to metallic iron. Currently BFCL has the manufacturing capacity of 1 Lac Ton per Annam which is self consumed