KOLKATA (miningweekly.com) - The Steel Authority of India Limited (SAIL) was on the hunt for mining contractors to develop its 117-million ton Tasra coking coal reserve in Jharkhand province.

This would be the company’s fourth attempt to raise four-million tons a year of coking coal from the reserves through outsourced mining, after earlier bids fell through owing to high project costs.

SAIL, the country’s largest integrated steel producer, has earmarked some $370-million to produce four-million tons a year from Tasra, with the investment to include a coal washery and a further 50 000 t/y production from the neighboring Sitanalla block, which has reserves of 45-million tons.

In a bid to sweeten the deal for contract miners, SAIL was now considering offering washed coal rejects to the miner for setting up power generation plants near the mine site. The terms and conditions would, however, be subject to approval of the company board of directors, officials said.

The Tasra and Sitanalla reserves were originally owned by government-owned Coal India Limited (CIL), but were subsequently taken over by the Indian Iron and Steel Company Limited (IISCO). The two coking coal reserves were part of the legacy received by SAIL when the latter took over the near defunct IISCO in 2006.

The development of the coking coal reserves was critical for the steel producers with the resource accounting for nearly 30% of the company’s cost of production of steel. Between July and September of last year, SAIL’s profits plunged 55% with the company attributing this largely to the higher cost of imported coking coal.

SAIL consumes some 14-million tons of coking coal a year to produce 16-million tons of hot metal, and coal consumption is forecast to increase to 21-million tons by 2013. At present, the company has domestic supplies of four-million tons of coking coal from captive mines and from CIL, while the balance is imported.
 

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