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India’s Steel Ministry has taken measures to prevent disruptions in iron ore supply and reduce dependence on coking coal imports from certain countries to guarantee raw material security for the steel sector, according to media reports.

The ministry cited in its annual steel report for the financial year 2019-2020 that numerous challenges faced by the sector have put pressure on the short as well as long term supply of raw materials.

Indian steelmakers anticipate a 45-50mn mt drop in the supply of iron ore this year as more than 250 ore mines have shut down. 

Major steps have been taken to safeguard iron ore supply and coking coal imports as they are the two main components required for steel production.

India’s largest steel processor, Steel Authority of India Ltd (Sail) was allowed by the government to sell 70mn mt of low-grade fines at their mines and 25pc of the total freshly mined iron ore.

SAIL has 20 captive mines in Jharkhand, Odisha, Chhattisgarh and West Bengal while last year it was given permission to restart Tasra coking coal mine.

Ministry of Coal has been requested to allow long-term linkage of raw coking coal to SAIL from Kalyaneshwari coking coal block.

India imports 56mn mt of coking coal annually worth Rs.720bn ($9.61bn) with the bulk coming from Australia (45mn mt), followed by South Africa, Canada, and the US.

India is in talks with Russia and Mongolia to avail more coking coal import sources. There is a proposal for reducing the royalty on iron ore fines from the existing 15 per cent to 5 per cent. 

The report said that Ministry of Coal has agreed to allocate Rabodih and Rohne coking coal blocks to RINL and NMDC, respectively, for which washeries with annual capacity of 2.5 mn mt and 2.24mn mt will be set up. 




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