SAIL plans to begin trial production of special rails by month-end: Chairman Amarendu Prakash

New Delhi: Steel maker SAIL plans to start the trial production of head hardened (HH) rails, used in metro rail and freight corridor projects, by month-end, its Chairman Amarendu Prakash said.

The steel PSU was earlier looking to start the trial production of HH rails in August but deferred it due to the demand for normal rails like 880 grade from the Indian Railways, Prakash told PTI in an interview.

"We have the technology. We had planned for it (HH rail production) but then...they (Railways) requested us to defer the trials and now it is at the end of October," the Chairman said.

HH rails are special rails used in high-speed freight corridors and metro rail projects. Such rails are manufactured using head hardening technology to bear about 50 per cent higher pressure compared to normal rails.

SAIL has set up facilities for the production of HH rails at the new Universal Rail Mill (URM) at its Bhilai Steel Plant (BSP) in Chhattisgarh, and the cold trials for the same have already been completed.

The PSU will be the second player in India to start the production of HH rails. Jindal Steel and Power Ltd (JSPL) produces HH rails at its plant located in Raigarh, Chhattisgarh.

SAIL also produces forged wheels for the Railways at Durgapur Steel Plant (DSP) in West Bengal, Prakash said. The rails and wheels are supplied to Indian Railways, he added.

On the sourcing of coking coal, Prakash said 'We source coking coal from various sources Australia, the US, Russia and Indonesia. We also have a JV company in Mozambique.'

SAIL sourced around eight coking coal shipments of 75,000 tonnes each from Russia during the April-September period of FY24.

To increase coking coal supplies, there are plans to double the production capacity of Mozambique-based ICVL from 2 MTPA to 4 MTPA, he said, adding a detailed project report is being prepared in this regard.

Mozambique-based ICVL is a special-purpose vehicle of SAIL, RINL, NMDC, CIL and NTPC for acquiring coal mines and assets overseas.

On the rising prices of coking coal, the chairman said it will directly affect the input cost and build pressure on profit margins.

From $230 a tonne in June-July 2023, the coking coal prices climbed to trade at $341 per tonne CFR (cost and freight) India in September end.

On the EU's mechanism of carbon border adjustment tax (CBAM) on exports, the official said, "It will add to the cost of supplies to Europe for Indian exporters. The exact impact and the quantum of impact is still to be assessed as Europe is still working on this."

The Steel Authority of India Ltd (SAIL), under the Ministry of Steel, is the country's largest steel-making company with an annual capacity of over 21 MTPA.