The Hindu Business Line : BSP facing coal shortage; may halt production soon

STEEL production in Bhilai Steel Plant (BSP) belonging to Steel Authority of India Ltd (SAIL), is likely to come to a halt within a day or two because of acute coal shortage.

According to sources, the coal inventory of BSP has dropped to 20,000-22,000 tonnes from the average level of 1-1.5 lakh tonnes and it is likely to meet only a day's requirement. The plant management has already ordered production cut to the extent of 30 per cent.

"With the current level of coal stock, we can just manage for one more day or half, despite cutting down the average production levels. And with financial year-end round the corner, this coal shortage will deal a huge blow to the fortunes of BSP," sources said.

BSP's average hot metal production is 14,500 tonnes per day. It was first reduced to 10,000 tonnes per day and now to 9,000 tonnes per day. Out of the six blast furnaces, one has stopped functioning and another is operating at half its capacity.

A senior official of SAIL confirmed that the plant was facing a coal shortage and "adjustments" had been made in production levels. "The situation is tight but there is nothing to panic," the official told Business Line.

Plant level officials held a different view. According to them, BSP's daily coal requirement is 12,500 tonnes and the practice is to maintain seven to days of stock. Of the total coal requirement, BSP imports approximately 80 per cent, which is around 10,000 tonnes. The rest is domestic coal.

Unlike other SAIL plants, BSP is heavily dependent on imported coal because of two reasons. First, it is located far away from the coal belt of India and nearer to the Vizag port. So, importing coal made sense. Secondly, imported coal is a better alternative for the plant.

The three Australian coal majors, namely BHP, MIM and Anglo Coal, had long term contracts for supplying coal to BSP. "Out of these three, supplies from two had stopped long back. It was supposed to resume from February but nothing much had happened," sources said.

BSP officials at the plant level are quite lost. They are not too sure of the plans of the SAIL headquarters. They are more worried as production cuts of this nature will affect the health of the plant.

Sources added that production of billets, which is currently fetching good prices at the export market, was cut down by 50 per cent. The merchant mill has stopped production. Similarly production at the rolling mill was shut down from Tuesday.

Out of the two steel melting shops, one is catering only to plates and rails and the other for the billets, merchant mills and wire rod production. "We have not hampered our plate and rail production," sources said.

Two sinter machines have already being closed down. The daily coke oven pushing rate was first reduced from 685 to 580 and now to 540. Even at the current production level, BSP needs 9,000 tonnes of coal per day.

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