The Hindu Business Line : SAIL strives to secure coking coal supplies

Steel Authority of India Ltd, the country’s largest steel producer, is sparing no effort in securing supplies of a key raw material—coking coal. (Its captive iron ore mines meet its entire requirements.)

A joint venture of SAIL and Tata Steel is asking Coal India Ltd to transfer three coal blocks to it. Alongside, a special purpose vehicle, with equity stakes for five public sector companies, has been formed. This company will look at opportunities to own coking coal mines abroad.

SAIL’s Chairman, Mr S. K. Roongta, told Business Line today that on the one hand domestic steel producers were suffering for want of coking coal. On the other, even the available coking coal deposits, though deficient in quality, were lying unexploited, he said.

Asked why Coal India Ltd, the public sector coal mining company that has a near-monopoly in India, would be agreeable to part with the mines, Mr Roongta said that developing these mines was perhaps not a priority for CIL.

“They have not developed them all these years. May be it is not in their plans to develop them. So well they may give it for a consideration,” he said.

He, however, added that now, with coking coal prices having risen three fold in the last one year (to about $ 305 a tonne, and even more in the spot market), developing some of the mines with Coal India and its subsidiaries had become viable. “I am sure they (CIL) will also make some investments, but it is better that their efforts are supplemented by steel companies, because they alone will not be able to make such large investments.”

Mr Roongta said it might cost up to Rs 2,000 crore to develop the mines and SAIL, being a Navaratna company with autonomy for investment decisions, was in a position to spend.

More Stories on : Outlook | Coal | Steel | Steel Authority of India Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page