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Tata Steel to develop new coking coal mine

Rabindra Nath Sinha

KOLKATA, July 2

TATA Steel has decided to open a new captive coking coal mine - South-Eastern Block (SEB) - at its West Bokaro Collieries (WBC) in view of the depleting reserves at its two existing mines, one at WBC and the other at Jharia, all in Jharkhand.

The proposed SEB mine has an estimated mineable reserve of 60 million tonnes (mt). The Phase I of the project is estimated to cost Rs 357 crore, including a forex component of Rs 115 crore.

According to informed sources in the Steel Ministry, Tata Steel has sought a loan for the rupee expenditure of Rs 242 crore from the Steel Development Fund (SDF).

The mineable reserves of the existing Quarry E are likely to be exhausted by 2004-05. As for the existing second mine, Quarry AB, the reserves will get exhausted by 2009-10.

Tata Steel's assessment has shown that it will make more sense to develop the SEB than to depend on imported coking coal. The landed operating cost of WBC coal at Jamshedpur will be considerably lower than that of imported coal, even with due allowance f or the superior properties of imported coking coal and their beneficial effect on blast furnace operations.

With the installation of stamp charge coke oven batteries, the company is ideally placed to use a higher proportion of medium coking coal for coke making.

The cost of plant and equipment has been worked out at Rs 294 crore while operating expenses for mine development will account for Rs 63 crore. The scope includes a coal handling plant to feed 3.8 mt of run-of-mine coal to the washery. A three-year timef rame, beginning 2001-02 has been determined to implement the first phase of the SEB mine.

Steel Ministry sources say that the SDF loan sought by Tata Steel is going to be sanctioned. After all, it is going to be linked to repayment of existing SDF loans by the company, which rules out the need for issue of cheque for the fresh loan.