Apex industry body ASSOCHAM has urged the government to put coking coal blocks to auction and allocate them through competitive bidding in order to boost domestic production of coking coal and generate revenue for the exchequer.
“Coking coal blocks should not be allotted on nomination basis as this would delay coking coal development in India and discourage creation of level playing field in steel sector,” said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in a communication addressed to Piyush Goyal, union minister of state for coal, power, new and renewable energy.
Import of coking coal by India’s steel industry crossed 45 million tonnes (MnT) in 2014-15 as against about 39 MnT in 2013-14 and the same is likely to increase to 180 MnT in wake of India’s ambitious target of producing 300 million tons of crude steel per annum by 2025.
Besides, India’s coking coal import has also increased from 13 MnT in 2003-04 to over 39 MnT in 2013-14 and during the same period coking coal production dropped from about 18 MnT to 14 MnT and supply of washed coking coal to steel plants was only 6.6 MnT 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 coking coal is given a big thrust,” said D.S. Rawat, secretary general, ASSOCHAM.
“Allocation of coking coal blocks to steelmakers has much merit as steel industry is capable of efficiently utilising 100 per cent of prime coking coal reserves from the blocks,” said Rawat.
In its letter to the union minister, ASSOCHAM has highlighted that many virgin coal blocks of Bharat Coking Coal Limited (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 coking coal blocks should be allocated to public sector steelmakers to ramp-up production to meet country’s growing coking coal needs.