Despite registering coal output in excess of 600 MnT for the first time in FY19, CIL’s production of coking coal has not been satisfactory in line with the rising demand.
Coking coal production by CIL rebounded after falling in FY18, to record 35.16 MnT output in FY19. The output was 6% higher on the year from 33.28 MnT in FY18, but has been subdued in terms of its share in total coal production.
CIL’s coking coal has accounted only 5.8% of the total coal volume in FY19. In fact, the share of coking coal has nearly halved in the past 5 fiscals.
Coking coal is a key ingredient for steel making, and in case of its limited availability in domestic market, Indian buyers generally resort to imports to meet their demand.
CIL had been putting in more efforts to revive the coal stock at the power plants, thereby increasing its non-coking coal output, subsequently; its coking coal output was affected in the process.
Subsidiary-wise Coking Coal Output:
India has very limited domestic reserves of coking coal and is understood by the fact that only 5 of the 8 coal producing subsidiaries of CIL contribute in coking coal output.
Moreover, among these, BCCL and CCL accounts for almost 99% of the coal production.
A break-up of output in FY19 indicated that BCCL was the largest coking coal producer in FY19. Output from BCCL was 24.51 MnT in FY19, up 5% Y-o-Y from 23.3 MnT in FY18.
CCL’s coking coal production increased 6% Y-o-Y to 10.19 MnT in FY19.
Remaining output was from SECL, WCL and ECL.
India Expected to Become Largest Coking Coal Importer:
India is expected to be the key source of import demand growth, and overtake China as the world’s largest coking coal importer in the coming years.
Unlike China, India has very limited domestic reserves of coking coal, and will need to increase imports to support the rapid growth of its domestic steel sector.
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