The steel ministry has taken measures to arrest likely disruptions in iron ore supply and cut India's import dependence on select countries for coking coal, a key steel making raw material, says a report. In its Annual Report for Financial Year 2019-20, the ministry said the steel industry is facing challenges both in the short and as well as in the long term in terms of raw material security. Therefore, the ministry is working to ensure raw material security for the sector, the report said.
Iron ore and coking coal are the two key raw materials used for steel making.
"A disruption in supply of 45-50 million tonnes (MT) iron ore is expected in 2020-21 owing to the expiry of about 37 working merchant mines (250+ mines in total) on March 31, 2020. The Ministry of Steel along with the Ministry of Mines has worked out a strategy to mitigate the likely shortfall," the report said.
Country's largest integrated steel producer SAIL was given permission to sell 70 million tonnes of low-grade fines lying at its mines. The company was also allowed to sell 25 per cent of the total fresh quantity mined from its captive mines.
Steel Authority of India Ltd (SAIL), under the Ministry of Steel, has over 20 captive mines spread across Jharkhand, Odisha, Chhattisgarh and West Bengal.
The ministry said it has also submitted a proposal to the Ministry of Mines for reducing the royalty on iron ore fines from the existing 15 per cent to 5 per cent in order to incentivise beneficiation and pelletisation as well as reduce the stockpile of low-grade fines dumped at mine heads. "Amendment made in Minerals (Mining by Government Company Rules) 2015 by the Ministry of Mines will help the steel CPSEs to get their mines renewed with certainty...," it said.
On supply of coking coal, the ministry said an attempt is being made to diversify the coking coal import sources by importing the fuel from countries like Russia and Mongolia.
The total import of coking coal in the country is about 56 million tonnes annually.
The ministry estimated its cost at about Rs 72,000 crore.
Out of 56 MT, about 45 MT is imported from Australia alone, while the remaining quantity is imported from South Africa, Canada and the USA. The ministry is in talks with Russia and Mongolia for supply of coking coal. This will provide India more options to source coking coal.
Meanwhile, SAIL has been granted renewal of its Tasra coking coal mine by the government of Jharkhand in November 2019.
Request has also been made to the Ministry of Coal to consider granting long term linkage of raw coking coal to SAIL from Kalyaneshwari coking coal block allocated to BCCL (Bharat Coking Coal Limited), a Coal India subsidiary. This coking coal shall be washed at SAIL's Chasnalla washery in Jharkhand.
"Ministry of Coal has also agreed to allocate through the reservation route, Rabodih and Rohne coking coal blocks to RINL and NMDC, respectively, for which these CPSEs shall be setting up washeries with 2.5 MTPA and 2.24 MTPA capacity, respectively," it said.