New Delhi: The government’s auditor—the Comptroller and Auditor General of India (CAG)—has pulled up state-run steel firm Steel Authority of India Ltd (SAIL) for being heavily dependent on imported coking coal despite having three mines for captive use. SAIL requires about 15 million tonnes coking coal annually, of which 12-13 million tonnes is imported, CAG noted in its latest report.

Coking coal is imported through either global tenders or under long-term agreements.

“The company is heavily dependent on import of coal though it has three captive coking coal mines. Development of captive mines augments indigenous coking coal availability and safeguards against volatility of import prices," the CAG pointed in the report.

SAIL has two fully functional captive mines at Jitpur and Chasnalla to extract coking coal. Besides, mining is done at Tasra colliery on a small scale, the report said.

SAIL has cited reasons like non-deployment of outside agencies, non-availability of equipment and material, shortage of sand and equipment breakdown, for low production, the audit watchdog said.

According to SAIL, the low level of production from Jitpur and Chasnalla and the delay in development of the Tasra mine contributed to increased dependence on imported coal.

It was also noticed it took five years (June 2002–July 2007) for the company to submit the mining plan for Tasra to the coal ministry, and the ministry’s final nod was obtained in June 2009. Mining on a small scale in pits started in 2009 in Tasra, but the company took another four years to enter into a contract with the mine operator for coal development and mining (in September 2013) to start full scale operations, the CAG said.

It further said SAIL had accepted the observations made by the auditor and was taking measures to pare losses. “While accepting the audit observations, the management stated that actions are being taken to minimise production losses at the Jitpur and Chasnalla coking coal mines," the report said.

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