Sajjan Jindal-led JSW Steel is planning to invest 2,000 crore to develop a virgin coking coal mine in Jharkhand. The company is awaiting an official announcement from the government after being named the winning bidder for the recently auctioned coking coal mine. The new mine should start operating in two to three years, according to JSW Steel. The mine, like the company's Moitra coking coal mine situated in the same State, has reserves of roughly one billion tonnes.
Seshagiri Rao, Joint Managing Director, JSW Steel told businessline that the company will blend 20-30 per cent of domestic coal with high quality coal to bring down the overall cost. “We will get about one million tonne of clean coal after both the mines come into operation in 2-3 years and this accounts for 6-7 per cent of our annual
requirement,” he added. On difficulties in developing a virgin mine, he said the company has considerable experience in mining and it currently operates four mines in Odisha, nine in Karnataka, a lignite mine in Rajasthan and one mine each in Dubai and the US.
The company intends to achieve 25-50 per cent backward integration in coking coal. It also targets to enhance captive sourcing of iron ore to 100 per cent from the current level of 50 per cent. Given the company’s steel production target of 25-30 million tonne (mt) per annum, it requires 55 mt of iron ore.
JSW Steel is not completely relying on coking coal integration considering sustainability of supply and price issues due to the ESG factor. However, it is very difficult for steel companies to substitute coal as the alternative fuel (hydrogen) is very expensive and the fuel is not viable with the current technology, he said. Due to the lack of major mines in India, it is difficult to even meet the existing integration in coking coal aim. The company needs 18 mt of coking coal annually at its current capacity.
The company needs around 4.5 mt of captive coking coal supply to reach 25% integration, but that kind of asset is not present in India, he said. The company is looking at coking coal assets all over the world with the goal of purchasing them at a fair price. The cost of long-term sustainable coking coal is between $150 and $170 per tonne. Rao, a multinational business called Glencore plc has achieved $34 billion in net profit despite the current instability in commodities prices, with more than half of the unexpected profit coming from the sale of coal.
.jpg "Redefining Consulting Services That Facilitates & Drives Agri Innovation")
.jpg "Startups In Fabrication Realm")
.jpg "Overcoming the Hurdles of Scaling a Startup")
