Tata Steel has sought the intervention of the Prime Minister’s Office (PMO) to allow domestic steel companies make strategic investment in the subsidiaries of state-owned behemoth Coal India Ltd to better exploit coking coal resources in India. Coking coal is an essential ingredient in steel making and India has reserves of a mere 17 million tonne, grossly inadequate to meet the growing demands of India’s steel companies.

In a letter to TKA Nair, principal secretary in the PMO, Tata Steel managing director B Muthuraman said the government must encourage public-private partnerships (PPPs) in operating virgin coking coal mines which are an exclusive domain of CIL and its subsidiaries at present.

Observing that Bharat Coking Coal Limited and the Eastern Coalfields Limited (both CIL subsidiaries) are not running profitably, he said, “…infusion of a strategic private partner (an existing steel producer) could help in turning around many of these loss-making operations.”

According to Muthuraman, domestic steel companies have charted out mega capacity expansion plans to quadruple the current output to 180-200 million tonne (MT) by 2020. “The existing demand-supply imbalance in the coking coal sector worldwide has led to unprecedented hikes in prices and also restricted availability. The supply situation of indigenous coking coal in India is quite grim with production stagnating for the last several years,” he noted.

To meet the demand for coking coal, steel makers import about 22 million tonne. “The situation is only going to worsen in the next four-five years with imports likely to double to 40-45 million tonne,” Muthuraman said.

... contd.