State-run miner Coal India Ltd (CIL) registered its highest coking coal production in the past five financial years as output increased 20% y-o-y to 46.61 million tonnes (mnt) in FY22.
However, production remained significantly lower than the levels seen over three financial years of 2014-15, 2015-16 and 2016-17, when the company had produced coking coal in excess of 50 mnt.
The company attained its all-time high production level during FY22, but it faced challenges in raising coking coal output due to limited reserves. In fact, the share of coking coal in overall production was a mere 7.5% in FY22, which improved marginally from 6.5% in FY21.
Bulk of the coking coal was procured from its two subsidiaries having the major share of reserves, ie, Bharat Coking Coal (BCCL) and Central Coalfields (CCL). The remaining output came from South Eastern Coalfields (SECL), Western Coalfields (WCL) and Eastern Coalfields (ECL).
Subsidiary-wise Coking Coal Production
Quantity in mnt | Source: CoalMint Research
Focus on coal washing
Coking coal is a key raw material for steelmaking. But, due to limited reserves, the country’s steel producers rely majorly on imports to satiate their requirements. Even the quantum of coking coal that is produced domestically is not adequate for usage due its high ash content.
India’s coking coal imports (excluding PCI) grew by 4.5% y-o-y to 53.1 mnt in FY22 compared to 50.86 mnt in FY21, as per data compiled by CoalMint. This came at a time when prices in the global market had touched record highs.
In order to improve the quality of indigenous coking coal, the government is planning to set up new washeries to reduce the ash content and unwanted components from the coal.
Thus, CIL commissioned the Madhuband coal washery at BCCL in FY22. At the same time, 5 new coking coal washeries with a combined annual capacity of 14 mnt are under different stages of development, as per government data.
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