Streamline coal e-auctions for steel sector: Indian Chamber of Commerce

The body also suggested allocating coal blocks to state PSUs for commercial mining

The Indian Chamber of Commerce (ICC) has demanded streamlining the process of coal e-auctions by Coal India for the benefit of steel units and sponge iron makers.

“Out of Coal India's total annual production for each financial year, certain percentage or quantity may be reserved for the steel sector (sponge iron/captive power plants). Steel prices are varying on a monthly basis and hence for any steel company to make commitment on price beyond one month or three months will be extremely challenging. Regular auction on a monthly/quarterly basis as is being carried out or iron ore would be a fair way to ensure level playing field since all the bidders will be sponge iron plants only”, the ICC stated in its recommendations submitted to the NITI Aayog.

The ICC has also suggested that the Ministry of Coal may allocate coal blocks to state PSUs like Odisha Mining Corporation (OMC) for commercial mining. PSUs taking up commercial mining would help ease coal supplies to sponge iron plans and their captive power units. The industry body has also pitched for formulating MDO (mine developer cum operator) guidelines to bring in global best practices for coal mining.

The state government has already written to the Ministry of Coal to allocate the Patrapada coal block with reserves of 1,042 million tonnes to OMC for commercial mining. Patrapada is one of the 10 Schedule-I coal blocks listed by the Ministry of Coal for non-regulated sectors. The remaining blocks identified are Nuagaon-Telisahi, Talabira II, Utkal, Biatarani West, Mandakini B, Rampia and dip side Rampia, Ramchandi promotional coal block and North of Arkhapal and Srirampur coal block.

The state government argued that allocation of a commercial coal block to OMC would facilitate sale of coal to non-regulated sectors.

There are 56 captive power plants (CPPs) of iron and steel and aluminium industries in the state with an installed capacity of more than 6,310 Mw. Besides, the annual requirement of coal for sponge iron units alone excluding the CPPs is estimated to be at least 30 million tonne per annum. The coal requirement of these end use industries is only expected to increase in the coming years with their expansion and commencement of production by more units.