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Companies India’s largest steel maker, Tata Steel and SAIL submitted proposals to the government of India to obtain allocation of coal mines Coal India Ltd’s (CIL). Efforts to get the coal mines run by small for the anticipated increase in coal material procurement costs, especially coking coal, for energy in steel production process.

SAIL and Tata Steel already has a 50:50 joint venture, S & T Mining Co., for the domestic coal mining. SAIL is also a stakeholder in the International Coal Venture Ltd., a special purpose vehicle floated by four other PSUs to buy coal mines abroad, with a potential investment of $ 2.25 billion.

“There are several coal mines with CIL is not being developed. We have asked for better service CIL coal and mine as we allocate so that we can develop them for the purposes of prisoners,” SAIL chairman SK Roongta told FE. SAIL has requested a block of coal to itself and also for S & T Mining, which was formed in January 2008.

Roongta said the joint proposal outlined the potential benefits of CIL, and SAIL and Tata Steel. Steel companies have also agreed to strict penal provisions for non-performance. “We have suggested that the mine was given to us on lease basis, with the obligation to develop them within a fixed time frame. The government could even guarantee of our banks,” he said.

Roongta said the proposal could prove a win-win situation for all. “We need to captive coal mines for steel making; CIL also get to make money and to meet the needs of our domestic coal, we do not choke our ports with their burdens with imports,” he said.

The coking coal mines must for both Tata Steel and SAIL, both currently only meet part of their requirements from captive sources. SAIL also has a base 100% captive iron ore, which not only made him immune to the global price hikes, but also improve the competitiveness as a competitor affected the global price fluctuations.

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