CAG pulls up SAIL for huge coking coal import despite 3 captive mines

The government's audit watchdog CAG has pulled up steel giant SAIL for being heavily dependent on imported coking coal despite having three mines for captive use.

State-run SAIL requires about 15 million tonne (MT) coking coal annually, of which 12-13 MT is imported, Comptroller and Auditor General (CAG) noted in its latest report.

Coking coal is imported either through global tenders or under Long Term Agreements (LTAs).

"The company is heavily dependent on import of coal though it has three captive coking coal mines. Development of captive mines augments indigenous coking coal availability and safeguards against volatility of import prices," CAG pointed in the report.

SAIL has two fully functional captive mines at Jitpur and Chasnalla to extract coking coal. Besides, mining is done at Tasra colliery on a small scale, the report said.

SAIL has cited reasons like non-deployment of outside agencies, non-availability of equipment and material, shortage of sand and equipment breakdown, for low production, the audit watchdog said.

According to SAIL, the low level of production from Jitpur and Chasnalla and delay in development of Tasra mine contributed to increased dependence on imported coal.

However, it was also noticed it took five years (June 2002July 2007) for the company to submit the mining plan for Tasra to Ministry of Coal, and the ministry's final nod could be obtained in June 2009.

Mining on a small scale in pits started in 2009 in Tasra, but the company took another four years to enter into a contract with Mine Developer cum Operator (MDO) for coal development and mining (in September 2013) to start full scale operations, CAG said.

It further said SAIL has accepted the observations made by the auditor and is taking measures to pare losses.

"While accepting the audit observations, the management stated that actions are being taken to minimize the production losses at Jitpur and Chasnalla coking coal mines," the report said.