Coal India Ltd will auction 1.5 million tonnes (mt) of coking coal, the public sector company's Chairman and Managing Director, Mr N.C. Jha, told Business Line today.

This quantity of coking coal — required for steel making — has piled up at pitheads of its various mines with steel companies not lifting the fuel, Mr Jha said. He said that he had spoken and written to steel manufacturers including SAIL, but to no avail. Mr Jha said the coking coal was of “superior quality” and was less expensive than imported coking coal.

Industry sources say that the value of ‘steel grade-1' quality is about $200 a tonne, which makes the inventory that is to be put on auction worth $300 million.

Only for enlisted buyers

The reason why steel manufacturers are not lifting the coal is not clear, but industry sources say that it could be because the coking coal with Coal India is reserved for ‘enlisted long-term buyers'— companies such as SAIL — that either have captive coking coal mines or import commitments.

“We are suffering, we badly need coking coal,” says Mr Rajiv Rai, Chairman of RKKR group of companies, which is putting up a speciality steel plant at Krishnapatnam, Andhra Pradesh. Mr Rai told Business Line that his company had applied to be enlisted as a long-term buyer, but it has not happened.

India produces about 60 mt of steel and that would require 40 mt of coking coal. Most of it is imported. The Jharia region in Jharkhand has some reserves, but the area is populated. The State Government has set up a Jharia Development and Rehabilitation Authority to build houses for the people elsewhere and have them move over, but “people have to agree to shift”.

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