SAIL seeking alternative solution to reduce dependence on imports

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KOLKATA: Stung by fluctuation in price of coking coal, a key imported raw material,Steel Authority of IndiaBSE -0.10 % Limited (SAIL) is desperately seeking an alternative solution to reduce its dependence on imports.

As part of this initiative, SAIL’s Colliery Division in collaboration with CSIR-Central Institute of Mining & Fuel Research, Dhanbad organised a workshop for “Augmentation of Indigenous Coking Coal Supply in Steel Industries” in the city on Saturday.

The meet was attended by SAIL’s Director (Raw Materials & Logistics), Kalyan Maity, and Director, CSIR-CIMFR P K Singh, who, along with industry experts addressed the issue of optimising use of domestic coking coal resources for the steel industry.

India has to heavily depend on imports of coking coal, as domestic coal has high ash content and is not suitable for steel industry. The country’s present coking coal production is around 50 million tonne (mt) out of which the steel industry uses only around 4 mt, while a major chunk of imports go to thermal plants.

With an estimated 6% growth, India is expected to produce 111 million tonne of steel by 2020. Accordingly, demand for coking coal imports is expected to go up to 75 million tonne from the 44.7 mt in 2014-15. To account for it, the foreign exchange outgo is tipped to nearly double to $ 6.9 billion from $3.5 billion.
At the workshop experts pointed out that setting up new coal washeries, reorganising the procurement mix, joint negotiation of steel producers’ with foreign suppliers and acquisition of coking coal mines will improve the situation. In this context, they cited the example of Japan which is the highest importer of coking coal, globally. The country manages to have a strong bargaining power during coal import talks by creating a group of steel producers who take part in negotiations jointly.