Times of India reported that the Indian steel industry may have something to cheer about under the new government so far as coal supply is concerned as the coal ministry has proposed allotting a coal block to a government miner under steel ministry for exclusively meeting demand from steel makers.

Industry sources said the idea of allotting a coal mine to a government company under the steel ministry exclusively for steel makers is on the table and has figured in discussions between the secretaries in the 2 ministries.

Sponge iron units have been facing shortage of thermal coal since no new supply allocations called linkages in industry parlance have been granted to them since 2007. Rising demand and de-allocation of mines have added to the shortage. The industry is facing coal crunch as their firm supply allocations were changed into tapering linkage after they were allotted captive mines. In many cases, the mines have been stuck in the absence of clearances or de allocated for missing timelines for developing them.

Simultaneously, the quantity of coal from Coal India earmarked for open sale through e-auction has been reduced to meet demand from power producers. The coal ministry has decided to reduce the earmarked quantity for e-auction from 10% of Coal India's annual production to 7% by 2017, the terminal year of the 12th Plan.