*Auctioned coking coal blocks have suboptimal capacities
*Domestic washed coal output has dropped over the years
*Diversion of metallurgical coal to power sector waste of vital resource
It is strange indeed that while the European Union’s (EU) declared list of critical minerals features coking coal prominently, the list of critical minerals published by the Indian government does not contain coking coal, observed eminent scientist R. Srikant, Professor and Dean, School of Natural Sciences and Engineering, Bangalore, while delivering his plenary address at the International Conference on Mining Beneficiation Technology (MBT) organised by Tata Steel in Jamshedpur.
“All the coking coal blocks that have been auctioned under the commercial coal mining auctions have suboptimal capacities of 1 million tonne (mnt) or less. No miner will be willing to put up a washery in these blocks,” he said.
Therefore, the “malpractice of scarce domestic coking coal reserves being channelled to the power sector for non-metallurgical purposes will continue,” he said.
“Many policies need to be changed,” he remarked.” We need changes in the Coal Bearing Areas Act and the Mineral Auction Rules, and to facilitate private-public partnership a lot of changes in existing statues are required. To bring about these changes the government has to acknowledge that coking coal for India is a critical mineral. The mining industry needs an integrated value chain to convert 35% ash domestic coking coal fit for use for the steel industry,” said Srikant.
Coking coal scenario
Domestic coking coal production stood at 60.8 mnt in FY’23. While CIL’s share in total production was an overwhelming 90% at 54.62 mnt, the captive miners (SAIL and Tata Steel) clocked total production at just over 6 mnt. As per BigMint data, CIL’s coking coal capacity stands at around 115 mnt, while the captive miners have a collective capacity of 15 mnt.
India’s hot metal production rose by 7.5% y-o-y to 86 mnt in CY’23. India relies almost 95% on imports for metallurgical coal, and total imports were assessed at 71 mnt in CY’23. With the incremental growth in BF-BOF steelmaking capacity, the country’s hot metal production is expected to touch 143 mnt in 2030 and metallurgical coal demand may reach a level of 112-115 mnt.
Lack of beneficiation
In FY’23, out of domestic coking coal production of 60.8 mnt, the share of washery grade IV (W-IV, ash content exceeding 28% but not exceeding 35%) was around 51%, while the share of W-V (ash exceeding 35% but not exceeding 42%) was around 37%. The effort is to bring down the ash content to 12-15% through beneficiation. Prime imported grades ideally have ash content of 9%.
However, data show that washed coal production in FY’23 was just over 5 mnt. Domestic washed coal production, accounted for primarily by Tata Steel and SAIL, has actually decreased over the last five years from around 5 mnt to 3 mnt, while CIL has raised production from 1.5 mnt to around 2.7 mnt. India has very low reserves of low-volatile hard coking coal. Washery capacity is still insufficient and yield is abysmally low making the process uneconomical.
India has no coking coal washeries. Out of 10 new washeries planned, two have been completed and the rest will be completed by 2026-27 to stop diversion of coking coal to the power sector. The government’s target is to produce 140 mnt of raw coking coal by 2030 to reduce import dependency.