India Steel Market Watch
October 13: JSW Steel has set in motion a proposal to develop the coking coal-rich Jharia coal mine region in Jharkhand to make use of the vital raw material, which is getting wasted by burning away in an underground fire, Seshagiri Rao MVS, Joint Managing Director at JSW Steel, told ISMW.
Due to unscientific mining in the past, the Jharia Coalfields, having around 10 billion tons of estimated reserves in the Dhanbad district of Jharkhand, had been facing the problem of fire and resultant land subsidence as well as rehabilitation of the affected persons.
Domestic steel-makers have to resort to costlier coking coal imports to meet their demand.
In order to address these issues, the government had approved a master plan for dealing with fire, subsidence and rehabilitation of affected persons. However, Jharia Action Plan, as it was called, failed to make any considerable progress after its initiation in 2009.
JSW has proposed setting up a special purpose vehicle (SPV) with Coal India Ltd’s unit, Bharat Coking Coal Ltd, holding the coal concession; retain a 51% investment-free stake and steel companies interested to invest in the project take up a stake of 35%, while the rest 10% can be held by the Jharkhand government and around 4-5% held by persons who would be impacted by the project, Rao said.
The proposal, which has been placed before the Government of India, needs an investment of Rs 7,200-10,000 crore, Rao said.
Rao said India needs to be self-reliant in coking coal if it targets 300 million tons of production by 2025-26.
JSW Steel, which is expanding steel-making capacity from 14.3 million tons to 18 million tons and subsequently to 30 million tons by 2020, currently imports around 20 million tons of coal, including 7-8 million tons of coking coal to carry on its operations.
“We buy coal from 17 different suppliers and try and blend different grades of coal with high end technology, including Corex, to get the desired result. Efforts should be taken to reduce coking coal imports and use indigenously available coking coal, which is available in abundance in the Jharia region but getting wasted due to underground fire,” Rao said.
According to India Coal Market Watch (ICMW, a sister publication of ISMW) data, India imported around 41.5 million tons of coking coal in FY15.