The Steel Ministry has sought coal blocks for two of its mining PSUs — MOIL and KIOCL — so that they meet the fuel requirement of various steel firms, reeling under the shortage of the dry fuel.
In a letter written to the Coal Ministry, the Steel Ministry has asked for coal blocks for the two firms, which will mine the blocks and supply coal to the steel firms.
"We have asked the Coal Ministry to give coal blocks to Manganese Ore India (MOIL) and Kudremukh Iron Ore Company (KIOCL) which have experience in mining. Blocks given will cater to the fuel requirement of steel firms exclusively," Steel Secretary P K Rastogi told PTI.
Separately, the Steel Ministry has asked the two firms to apply for coal blocks with the Ministry of Coal, he said.
Steel companies have been complaining of shortage of coal to run their plants. While coking coal is used in the process of steel making, non-coking or thermal coal is used to run the captive power plants.
In a meeting of the Inter-Ministerial Group on steel yesterday, leading steel producers like SAIL, Tata Steel, JSW Steel pointed out coal shortage as one of the primary reasons hurting their production targets. The delay in allotment of coal blocks for captive was also hitting their growth plans.
"They said that only 50 per cent of their coal requirement is being met at present and the Steel Ministry should do something about it," Rastogi added. The request if heeded would also give a fillip to the business of the two firms.
The move may also end the monopoly of state-run Coal India in supplying coal to steel, power and cement companies, at present.
"MOIL is a mini-ratna company. If the Coal Ministry grants blocks to the two companies, MOIL will get an opportunity to diversify from manganese to coal and the ailing KIOCL will get a fresh lease of life," Rastogi said.
Iron ore mining at KIOCL was stopped on December 31, 2005, as per the directions of the Supreme Court, which upheld the decision of a committee of the Ministry of Environment and Forest, barring the firm to undertake mining activities. The company was completely shut last year.
The Steel Ministry had put on hold the proposal to sell about 9 per cent of government's equity in the firm. The ministry is rather working to revive the ailing company.
Nagpur-based MOIL deals in manganese and ferro alloys. It currently operates 10 mines in Maharashtra and four in Madhya Pradesh. The Finance Ministry is now studying the Steel Ministry's proposal to disinvest 10 per cent government's stake in it.
