Apex industry body, The Associated Chambers of Commerce and Industry of India (ASSOCHAM), has recommended the Indian government put metallurgical coal blocks to auction and allocate them through competitive bidding in order to boost domestic production of metallurgical coal and generate revenue for the exchequer.
“Coking coal blocks should not be allotted on nomination basis as this would delay [metallurgical] coal development in India and discourage creation of level playing field in steel sector,” stated ASSOCHAM in a letter addressed to Piyush Goyal, Union Minister of State for Coal, Power, New and Renewable Energy.
Import of metallurgical coal by India’s steel industry crossed 45 million t in 2014 –2015 compared to approximately 39 million t in 2013 – 2014. It is reported that this is likely to increase to 180 million t in wake of India’s ambitious target of producing 300 million tpa of crude steel by 2025.
Additionally, India’s metallurgical coal import has also increased from 13 million t in 2003 – 2004 to over 39 million t in 2013 – 2014 and during the same period metallurgical coal production dropped from about 18 million t to 14 million t and supply of washed metallurgical coal to steel plants was only 6.6 million t in 2013 – 14.
“This is resulting in a loss of forex reserves, stress in inland transportation and logistics and congestion at ports, as such it is imperative that indigenous production of [metallurgical] coal is given a big thrust,” explained D.S. Rawat, Secretary General, ASSOCHAM.
“Allocation of [metallurgical] coal blocks to steelmakers has much merit as steel industry is capable of efficiently utilising 100% of prime [metallurgical] coal reserves from the blocks,” continued Rawat.
In the letter to the Union Minister, ASSOCHAM has highlighted that many virgin coal blocks of Bharat Coking Coal Ltd (BCCL) are lying undeveloped despite being allocated long back, while operational blocks of BCCL are unable to produce to their full potential.
Similarly, ASSOCHAM has urged that metallurgical coal blocks should be allocated to public sector steelmakers to ramp-up production to meet country’s growing metallurgical coal needs.
Edited from press release by Harleigh Hobbs