SAIL aims to be India’s top iron ore producer
India’s largest steel producer Steel Authority of India (SAIL) is hoping to emerge, over the next 18 months, as the country’s largest iron ore producer.
If it can get clearances and approvals for all its captive mines, SAIL could surpass the iron ore production capacities of National Mineral Development Corporation (NMDC), says CS Verma, SAIL chairman and managing director, in an interview with ET. Verma has recently taken over temporary charge of NMDC.
The ramping up of iron ore mines is critical to SAIL’s expansion to 24 million tonne of steel that has suffered a considerable delay. Excerpts:
What made you accept the post of CMD at NMDC? Aren’t your hands already full with many responsibilities?
The NMDC offer was assigned to me and I could not deny any responsibility at a senior level. There is a lot of synergy between the operations of NMDC and SAIL. We at SAIL are operating mines similar to iron ore mines being operated by NMDC.
So, I don’t see any difficulty in overseeing both the operations. I just need to devote more time because of additional responsibilities . NMDC is producing around 28 million tonne of iron ore. In SAIL, we are also producing iron ore, which is roughly around 25 million tonne.
And in the next one-and-a-half years, our iron ore production is going to be around 42 million tonne when our steel making capacity will go up to a level of 24 million tonne. The iron ore production of NMDC will reach to around 40million tonne over the next three years.
Today, we at SAIL have iron ore reserves of 4 billion tonne. Of the country’s proved iron ore deposits, nearly 20% is with our company.
What is the status of ICVL after some of its partners announced to pull out of the venture?
One of the partners of NTPC said that they want to withdraw from ICVL since it is meant for acquiring coking coal assets and NTPC doesn’t have any interest in coking coal as its interest lies in thermal coal. Initial hiccups happen in any new company.
To me, besides acquisition, it is the operation of the mine, evacuation of coal and bringing it to India that are more important. We are looking at coking coal mines in east and west parts of the globe as well which include Australia, USA, Mozambique, Indonesia and South Africa.
How do you explain the delays in SAIL’s expansion programmes?
There have been some local issues and challenges and these issues are getting resolved. Due to hard rock at IISCO Burnpur, our civil piling works went up by four times.
We took up expansion and modernisation, which had not taken place for many years, in almost all the plants on a parallel basis. Expansion and modernisation in a steel plant is a herculean task. Some challenges always happen. And there are ways to surmount these challenges and we are doing it now.
What has been the progress on modernisation and expansion so far?
Today, our capacity is about 14 million tonne per annum. It is going to be 24 million tonne after the first phase of expansion and modernisation is completed. The total cost of expansion and modernisation is Rs 72,000 crore and we have already placed orders worth about Rs 58,000 crore.
Of this, about Rs 38,000 crore of expenditure has already been incurred. We have already commenced some of the schemes of the expansion and modernisation. I do hope that by the end of this financial year, our capacity of hot metal will reach 19 million tonne from the current 14 million tonne.
The completion of the ongoing expansion will make SAIL among the world’s top ten steel makers from the existing 15th position.
Having addressed most of these challenges , we are now confident of meeting the deadlines for expansion and modernisation with the help of tight project monitoring, constituting dedicated teams for on-the-spot decisions to resolve the local challenges, adopting high technology for monitoring and having a board-level sub-committee for overseeing the program.
How are you addressing the coking coal needs?
Our coking coal requirement as of now is around 15 million tonne a year. We are sourcing some 4 million tonne from the domestic players such as CCL and WCL though not a premium grade. We are importing the balance 11 million tonne, of which 2/3rds is being imported from Australia and 1/3rd from the US and other countries.
We have 31 coke oven batteries at various locations. We are also setting up three new coke oven batteries one each at Bhilai, Rourkela and Burnpur as part of the expansion and modernisation program.
Further, for the first time in SAIL, we have decided to set up two more coke oven batteries — one each in Bhilai and Bokaro — both of which are stem charge batteries. The proposed batteries will have a capacity of 0.4 million tonne each, involving an investment of around Rs 800 crore.