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Bengal seeks coal blocks to boost steel output

business Updated: Jan 08, 2009 20:59 IST
Anupama Airy
Anupama Airy
Hindustan Times
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West Bengal, home to country’s biggest steel plants, has asked the Centre to allocate nine new coal blocks for the timely implementation of the upcoming steel capacity in the state.

The state government has approved mega private sector investments worth billions of dollars for setting up of new integrated steel plants with an estimated capacity at over 32 million tonnes per annum.

In a letter to the minister of state for coal, Santosh Bagrodia, the West Bengal minister-in-charge of commerce and industry, Nirupam Sen said, “West Bengal succeeded in attracting these investment proposals in the steel sector primarily on the strength of coal availability. However, despite such huge requirements, no coal block has been allocated to the state in 2008.”

The coal requirement of these steel plants is pegged at around 54 million tonnes per year. “Coal linkages needs to be ensured for timely completion of these projects,” Sen added.

The coal ministry had allocated five coal blocks to the state during 2006 and 2007, in addition to the earlier allocated Trans-Damodar block. The state has recently signed an agreement with NMDC to explore and mine the coal reserves of Deocha Pachami, which has reserves worth two billion tonnes.

Following a drop in the commodity prices world over, steel companies are in the process of reworking their investment plans. “We need to balance out the demand coming from the coal consuming sectors like power and steel. As steel companies are announcing production cuts, the size of new steel projects will also get affected. Allocation of coal blocks will be done only once these reworked capacity plans are in place,” said a coal ministry official.