SAIL exploring new markets to procure coking coal


State-run steel maker SAIL is exploring new markets for the sourcing of coking coal with a view to reducing dependence on select countries for the raw material, its chairman Anil Kumar Chaudhary said.

According to official data, the country imports about 56 million tonne (MT) of coking coal worth around Rs 72,000 crore. Out of this, about 45 MT is imported from Australia alone, and the remaining from South Africa, Canada and the US.

“Domestic steelmakers depend heavily on imported coking coal. For SAIL as well, metallurgical coal (coking coal) is largely procured through imports apart from some domestic sourcing. We are looking at developing new destinations and vendors for sourcing coking coal from the international market to avoid dependence on limited sources,” the SAIL chairman said.

Raw material security holds significance for the steelmaker which plans to more than double its capacity to 50 MTPA by 2030.

Chaudhary further said that SAIL is part of a joint venture International Coal Ventures Limited (ICVL) with the aim to acquire mining assets abroad. PSUs like RINL, NMDC, CIL and NTPC are partners in the JV.

ICVL has acquired coal mines and assets in Mozambique with coal reserves of more than 500 MT. The mining from these overseas assets is gradually being enhanced, he said.

According to the company data, during 2019-20, requirement of about 1.53 MT coking coal was met from indigenous sources like Coal India Limited and captive sources while the balance 13.70 MT was met through imports.

Earlier, official auditor CAG had pulled up the steel giant for being heavily dependent on imported coking coal.

On sourcing of iron ore, another key steel making raw material, he said the company meets its entire iron ore requirements from captive sources.

During 2019-20, the company”s captive mines produced about 29.28 MT of iron ore. The steel maker, under the Ministry of Steel, has five integrated steel plants and over 20 captive mines spread across Jharkhand, Odisha, Chhattisgarh and West Bengal.

When asked about its expansion plan, Chaudhary said “SAIL is always aligned with the country”s vision of reaching 300 MTPA by 2030-31 which is a huge leap from the current domestic levels of around 140 MTPA. “So, in sync with the rising domestic steel capacity, SAIL has also envisaged going beyond its current installed levels. Depending upon market demand and the new opportunities, the company will take suitable actions.”

On the plans of setting up an auto-grade steel plant in JV with ArcelorMittal in India, he said SAIL and the L N Mittal-owned company had entered into an MoU in this regard and discussions were even in advanced stages.

“Even though the discussions with ArcelorMittal reached an advanced stage, the same took a back seat when AM (ArcelorMittal) got engaged in acquisition of Essar Steel under the NCLT mechanism,” the chairman added.

However, the technology for making auto-grade steel is available with other steel companies as well for which SAIL is exploring different options, he said.

Earlier, two separate delegations of Indian steel PSUs led by Ministry of Steel visited Japan and South Korea for deliberations with the steel firms in these countries for further expansion and probable areas of technological collaboration towards manufacturing of high grade steel including steel for auto-body sheets, Chaudhary informed.

SAIL and the Luxembourg-based ArcelorMittal had entered into an MoU in May 2015 to explore the possibility of setting up an auto-grade steel manufacturing facility under a joint venture in India.

About two-and-a-half years later in December 2017, the SAIL board approved the proposal to enter into a joint venture with the world”s largest steelmaker ArcelorMittal for manufacturing high-end automotive steel. However, a definitive agreement in this regard was to be finalised in due course, subject to financial viability.

The chairman said that there was no delay from SAIL”s side. The company had even written a letter to ArcelorMittal asking the latter to expedite the process for signing the definitive agreement but the effort could not gain fruitful results.

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Arushi Sana
Arushi Sana is the Co-Founder of Santerra Living, a bio-pellet factory that makes a renewable form of eco-coal and Co-Founder of NYK Daily, a global news platform. She was awarded the Times Power Women of the Year 2022, Times Digital Entrepreneur of the Year 2023, Silicon India's Top 10 Women Owned Startups of Hyderabad 2023 and IHW Council Climate Health Influencer 2024. Arushi is also a speaker for Sustainability and Entrepreneurship at various forms like the World Bank, UN International Solar Alliance and Universities, and was also invited to the UN COP28 UAE Climate Conference. She is a Sustainability Consultant for organisations looking to reduce their carbon footprint and also works with brands on social media to help them carve a presence in that niche. She holds a Degree in Computer Science Engineering from VIT University and a Diploma in Marketing Analytics from IIM Nagpur. She has previously worked in Ernst & Young and Deloitte as a Forensic Data Analyst. Arushi is a writer, political researcher, a social worker, a farmer and a singer with an interest in languages. Travel and nature are the biggest spiritual getaways for her, and she aims to develop a global community of knowledge and journalism par excellence through this News Platform.

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