Coal Criticality in India's Steel Dreams

Arun Kumar Jagatramka

Gujarat NRE group

Disclaimer

The views expressed here contain information derived

from publicly available sources that have not been

independently verified. No representation or warranty

is made as to the accuracy, completeness or reliability

of the information. Any forward looking information in

this presentation has been prepared on the basis of a

number of assumptions which may prove to be

incorrect. This presentation should not be relied upon

as a recommendation or forecast by Gujarat NRE

These are heady days for steel, as events unprecedented are turning the industry on its

head...

In Europe,

consolidation is the buzz word

and the world's largest is on the roll

In the

United States,

Russians

are now controlling a significant chunk of the manufacturing

capacity.

In China,

the hunger

for capacities

and the sheer scale

of new additions

are showing

no signs of abetting, even after the

Olympics

And in India, the Nation is reading to overtake Japan in terms of steel strength and emerge as the world's second largest producer within the

next decade.

Iron ore from Brazil and India.

Coke & Coal from China and Australia.

Technologies from Europe

and

Capital from around the world are making voyages to newer and newer shores

as the new era of global resurgence dawns, an era

with sinews of steel.

193 new MOU’s already signed

245 million tons

Proposed Investment US $ 120 billion

Capacity in

2020 – about 300 million tons

INDIA – VISION 2020

This will mean a coking coal demand of :

• 150 million tons

• (even if 50 %

• of the production

• is through the

• BF route)

Expected Indian Coke Consumption & Coking Coal Demand Projections

(Conservatively based on additional 50 million tons of steel by 2012 and

further 100 million tons by 2020)

year 2005 2007 2012 2020

Coke

Consumption

21 25 60 120

Coking coal reqd. 28 35 84 170

Indian coal 8 8 9 12

Nett import demand

(equivalent coal)21 27 75 158

(million tons)

Source: Internal Company estimates

And

• Infrastructure

• Power

• Skilled man power

• Capital

• Ports & Railways

• Raw materials

India has everything

• (Or can procure from the global mall in the very short term)

• EXCEPT

• Coking Coal & Coke

China facts• The dragon country had cut

output by 72 per cent to control pollution before the

Games.

• After having staged the best ever and costliest Olympics globally, China is all set to renew its charge in massive and rapid urbanisation of its large and heavily populated

rural areas keeping the demand pressure on

resources to the maximum

•