JSPL made winning bid for Gare Palma IV/1 coal block: MD

The coal from Gare Palma IV/1 will be used for our Raigarh plant as well as for captive power plants which are near the mines, says VR Sharma, MD, JSPL. Excerpts from an interview with ETNOW.

Did Jindal Steel make the winning bid for coalfield Gare Palma IV/1?

Yes. The highest bid is Rs 230 a ton and that is from our side. We are the H1 bidders and this is against the Rs 150 per ton of the reserve price declared by the government. The bid is at Rs 230 a ton is 53.3% higher than the reserved price. The coal from Gare Palma IV/1 will be used for our Raigarh plant as well as for captive power plants which are near the mines.

Whatever efforts are being made by the honourable Prime Minister Mr Modi and honourable Finance Minister Ms Sitharaman to give the impetus to the economy, I am very much sure and confident, will definitely boost Indian economy.

The annual capacity is 6 million tons. In the beginning, I am sure you will be able to extract the amount. a) How much do you think you will be able to extract and to what extent, will it cater to your raw material requirement?
For Raigarh, we will be self sufficient. Also, our CPP will be self sufficient. This has the reserves for about 10-12 years and this will definitely add to the EBITDA of the company. More than EBTIDA, the problem that we have been facing was over lack of availability of coal from overseas as well as from the local mines and it was hampering our production.

Now our production will be in full strength and Raigarh, power plants, CPP and Raigarh Steel Mill will show a very positive results. The government intention of increasing the overall growth of the manufacturing sector will be served and it will also improve the manufacturing sector’s sentiments.

About three-four years ago, the government had not allowed JSPL to bid for the coal block. There was non-aggressiveness as they termed it on JSPL’s part and there was an allegation that there is poor yield from Gare Palma. For one mine block, coal post washing was 40% and rejects was 60% and most of them was of middling quality, so that even though 6.5 million tonnes was the capacity, you could get only 3.6-3.8 million tonnes. What has changed between then and now?

Actually I do not remember the statements made or the declarations, but one thing to remember is steel making and power plants go on hand in hand. The middling and lower value of coal is used for power production. We have CFBC boilers which are suitable for low grade of coal and for DRI we have to have a better grade of coal. . Directly also one of mines can be used in power plants and also the middlings and the low calorific value coal can be used in the CFBC boilers.

How much is the middlings or the rejects? Roughly what percentage of the yield?

We can use a little higher calorific value or lower calorific value but your cost of production increases or decreases when you are using a better coal versus bad coal. That is a trade off you have to find because now it is has been a couple of years. We have to start using this coal once again and then we will see which seam of the coalmine has what kind of coal. But for sure, we have a chance to be self reliant in coal energy for 10 years.