VSP privatization: Coking coal import main reason for loss

The issues of the captive mines and coal availability are surfacing at a time when Union government has in-principle approved 100% disinvestment in RINL-Visakhapatnam Steel Plant citing the losses.

AP political leaders, in a bid to prevent the privatization process of the steel plant, are faulting the Centre for not allocating the iron ore mine to VSP.

In Rajya Sabha, YSRCP senior parliamentary leader, V Viajayasai Reddy, also raised questions regarding coal mines. He asked if the Coal Ministry is aware of constraints faced by some PSU steel plants in view of non-availability of captive mines and also the fact that steel plants are forced to buy coal from open market/import from other countries at an exorbitant cost, resulting in losses.

"It is a fact that there is a shortage of coking coal used in steel plants and some part of their requirement is met by the companies from imported coking coal. Steel plants require low ash content of coal for their sustainability with respect to techno-economics as well as environmental aspects. The overall availability of coking coal from indigenous sources is inadequate to meet the requirement of steel plants. The ash content in unwashed indigenous coking coal is typically in the range of 22-35% whereas technological requirement of ash content in coking coal for use in steel plants is normally about 10-12%. High ash indigenous coking coal is washed in coal washeries to reduce ash content. Even after washing, indigenous coking coal typically contains about 18-20% ash," the coal ministry said.