Coalmine auction an opportunity for domestic sponge iron units: Analysts

Sponge iron plants could shift to new technology on availability of coal

With government opening coalmine auctions for commercial extraction, an opportunity for the domestic sponge iron industry has emerged. Players could now look to have a coal-gasified direct reduced iron (DRI) plant though investment cost would be a big constraint.

“We see a potential for at least 10-12 new (coal-gasification based) DRI plants to come up across country. Incentivising coal gasification is an encouraging move for the sponge iron industry which faces stiff competition from cheap scrap imports,” VR Sharma, managing director at New Delhi-based Jindal Steel & Power Ltd, told Business Standard.

Jindal Steel and Tata Sponge are among the