Coal news and updates

Steel and mines minister Narendra Tomar has asked finance minister Arun Jaitley to roll back the 2.5 per cent customs duty on coking coal to contain the economic hardships being encountered by the domestic steel industry.

The steel companies are already combating severe paucity of iron ore owing to mining curbs imposed in some states and the fresh import duty on coking coal and metallurgical coke is bound to compound their financial woes, Tomar has said.

He has written to the finance minister on August 25 seeking express roll back of the customs duty. Coking coal, after being converted into coke, is used as a fuel to make crude steel from sponge iron and sinter.

During 2013-14, domestic steel producers imported 33.12 million tonne coking coal and this year the imports are expected to rise by  3 MT owing to the commissioning of new manufacturing facilities.

Tomar has also asked Jaitley to withdraw the 2.5 per cent import duty on iron ore saying its poor availability has ‘compelled some steel makers to source the mineral from abroad.

“In the absence of domestically extracted iron ore, some leading steel makers are actively contemplating to import the mineral from abroad,’’ the minister suggested in the letter.

A senior steel ministry official said the country may have to import nearly 3 MT iron ore during 2014-15. Portraying a grim picture on paucity of iron ore, he cited that a 35 per cent dip in ore output over past 4-5 years has triggered concerns within the steel industry.

This steep fall in ore output is primarily due to restrictions imposed on mining in the two largest ore producing states — Karnataka and Goa along with output curbs by Orissa. The country used to produce 200 MT of iron ore a year and exported 50 per cent of it before the Supreme Court imposed a ban on exploration in Karnataka to curb illegal mining in 2011.

The steel companies have together recently asked Tomar to convince the government to contain the surge in steel imports from China amidst scarcity of iron ore and muted demand.

They have cited figures showing that total steel imports from China has surged by 100 per cent, it was up by 51 per cent from South Korea. Imports of hot rolled flat steel have increased by 57 per cent. Of this, China saw a 460 per cent increase and South Korea 259 per cent.

 

 

Source: http://indianexpress.com/