Assocham wants auction route for coking coal blocks

New Delhi: Industry body Assocham has made a plea to the government to auction coking coal blocks, a move that would boost indigenous production and generate revenue for the exchequer.

"Assocham has urged the government to put coking coal blocks in auction mode and allocate the same through competitive bidding," the industry chamber said in a statement.

"Coking coal blocks should not be allotted on a nomination basis as it would delay the development of coking coal in India and create a non-level playing field in the steel industry," it added in a communication to the Steel Ministry.

According to the Assocham Secretary General D S Rawat, there is an urgent need to revamp domestic mining to bolster production as the country's steel sector demand for coking coal is expected to reach about 180 million tonnes per annum (mtpa) by 2025, from the current level of about 50 mtpa.

"Allocation of coking coal blocks to steelmakers has much merit because the industry is capable of efficiently utilising 100 per cent prime coking coal reserves from the blocks," said Rawat.

The apex body also said many virgin blocks of Bharat Coking Coal Limited (BCCL), a Coal India arm, are currently lying underdeveloped despite being allocated long back and even the operating blocks of the company are unable to produce to their full potential. Besides, steelmakers in the public sector which have been allocated coking coal blocks have failed to ramp up production, it said.

Owing to limited availability of appropriate coking coal quantities, there is a huge gap in the country's coking coal production vis-a-vis demand, two-thirds of which are being imported by the steel industry, it said. "This is resulting in a loss of forex reserves, stress in inland transportation and logistics, together with congestion at ports," Assocham said.