New Delhi, September 26: With an aim to strengthen raw material availability, steel giant Steel Authority of India Limited (SAIL) and Bharat Coking Coal Limited (BCCL), a Coal India subsidiary, have signed a Memorandum of Understanding (MoU) to develop two coking coal blocks in West Bengal. This partnership between the two PSUs is aimed at enhancing coking coal availability for steel production and to cut reliance on costly coal imports.
This collaboration is aimed at developing two coal blocks with a targeted capacity of about 4 million tonnes per annum (MTPA). By leveraging BCCL’s coal extraction expertise with SAIL’s requirements as a captive customer, this integration is aimed at offering a steady flow of high quality coal to SAIL’s integrated steel plants.
Currently, the Indian steel industry has to import about 60 million metric tonnes of coking coal, almost 95% of its requirements, from countries like Australia, Indonesia and the US. With this agreement, Coal India aims to boost India’s cost competitiveness in steel production, as volatile coking coal prices in international markets can make Indian steel uncompetitive abroad.
This collaborative strategy is aimed at integrating BCCL’s coking coal mining operations at the Indikatta Ramnagore and East of Damagoria blocks in West Bengal with SAIL’s industrial asset base. Given that these blocks are close to key steel plants in East India, this will immediately mean lower freight costs. Beyond this, the increased mining activity is expected to boost local employment and stimulate regional economic growth.
