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The domestic steel industry's dependence on coking coal could drop significantly once new technologies such as FINEX and Corex integrate into the industry, according to the Chairman of the Steel Authority of India Ltd, Mr C. S. Verma.
“At the moment India requires 30-35 million tonnes of coking coal annually. But most steel companies have technology tie-ups that allow the steel-making process to be carried out without using coking coal. This would help reduce our coking coal needs in the long term,” said Mr Verma.
SAIL and Posco are already in the midst of finalising a joint venture that will pave the way for the use of FINEX technology in the Indian steel-making industry for the first time. SAIL is also bringing in iTMK3 technology through a tie-up with Kobe Steel. Competitor, Tata Steel, has a pact with Japanese steelmaker Nippon Steel which will also bring in next-generation steel-making technology into the industry.
“But the industry must come together and find solutions for acquiring coking coal assets to meet our short- to medium-term needs. The National Manufacturing Competitiveness Council (NMCC) has also drawn up pointers to help steel companies go in for overseas acquisitions of coking coal assets,” added Mr Verma.
Indian coking coal suffers from high ash content and low calorific value. In fact, prime coking coal, which represents a superior quality ideal for steel-making, constitutes only 16 per cent of the total coking coal reserves and, thereby, increases the country's need for imported coking coal.
At the moment, raw material costs constitute 55-60 per cent of the cost of steel-making and of this, coking coal's share is 40-43 per cent.
“It is important to invest in new technology as in the long term it will help bring down a large chunk of the cost of steel-making,” the SAIL Chairman told Business Line .
According to Mr Verma, the non-availability and low quality of coal in the country continue to be a matter of concern for the steel industry.
He added that the country was largely secure on the iron-ore front, “We have sufficient reserves for the growing industry. The country has nearly 25 billion tonnes of iron ore so this won't be a hurdle for the industry.”
Giving his outlook for the industry, the SAIL Chairman said, “We have to increase the per capita consumption of steel per annum. This would get a boost from infrastructure spending of one trillion dollars in the 12th Plan. The incremental steel demand by that time is likely to be 75-80 million tonnes. The World Steel Association is also projecting that growth in India will be higher than the world average. So, I would say the Indian steel industry is in a healthy position.”
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