Steel Authority of India Ltd (SAIL) is gearing up to commence trial production of head-hardened (HH) rails, primarily used in metro rail and freight corridor projects, by the end of this month. The Chairman of SAIL, Amarendu Prakash, disclosed the company’s plans.
Initial Deferred Timeline
Initially, SAIL had aimed to initiate the trial production of HH rails in August. However, this timeline was deferred due to increased demand for standard rails, specifically the 880 grade, by the Indian Railways. Prakash explained this adjustment in a recent interview with PTI.
Advanced Rail Technology
Head-hardened (HH) rails are advanced rails designed for use in high-speed freight corridors and metro rail initiatives. These specialized rails are produced using head-hardening technology, allowing them to withstand approximately 50 percent higher pressure compared to conventional rails.
Production Facilities at Bhilai Steel Plant
SAIL has established dedicated facilities for HH rail production at the new Universal Rail Mill (URM) within its Bhilai Steel Plant (BSP) located in Chhattisgarh. The cold trials for these advanced rails have already been successfully completed.
SAIL as the Second Player
Upon commencement, SAIL will become the second player in India to manufacture HH rails. Jindal Steel and Power Ltd (JSPL) is another producer of HH rails, with a plant situated in Raigarh, Chhattisgarh.
SAIL’s Contribution to Indian Railways
SAIL’s contributions to Indian Railways extend beyond rails, as the company also manufactures forged wheels for the rail network. These essential components are supplied to Indian Railways to support their extensive operations.
Coking Coal Sourcing
Amarendu Prakash highlighted SAIL‘s diverse sourcing of coking coal, which includes countries such as Australia, the United States, Russia, and Indonesia. Furthermore, SAIL has a joint venture (JV) company in Mozambique to enhance its coking coal supply.
Doubling ICVL Production Capacity
In efforts to increase coking coal supplies, SAIL has plans to double the production capacity of the Mozambique-based International Coal Ventures Limited (ICVL) from 2 million tonnes per annum (MTPA) to 4 MTPA. A comprehensive project report is currently in preparation for this expansion.
Impact of Rising Coking Coal Prices
The Chairman acknowledged the direct impact of rising coking coal prices on input costs, which in turn places pressure on profit margins. Coking coal prices increased from USD 230 per tonne in June-July 2023 to trade at USD 341 per tonne CFR (cost and freight) India by the end of September.
European Union’s Carbon Border Adjustment Tax
Regarding the European Union’s mechanism of the carbon border adjustment tax (CBAM) on exports, Prakash expressed concerns about its potential impact on Indian exporters. However, the precise extent of the impact remains uncertain as Europe continues to work on this initiative.
SAIL, a major player in the steel industry, operates under the Ministry of Steel and boasts an annual production capacity of over 21 million tonnes per annum (MTPA).
(With PTI inputs)