NEW DELHI: The government should classify coking coal as a critical mineral and extend special provisions to increase its domestic production, according to a report by Niti Aayog.
The report, titled “Enhancing Domestic Coking Coal Availability to Reduce the Import of Coking Coal,” highlights the importance of fully utilising India’s proven reserves of medium coking coal, estimated at 16.5 billion tonnes, to meet the country’s metallurgical needs in alignment with its Net Zero commitments by 2070.
“Coking coal accounts for approximately 42 per cent of steel production costs, making it essential for infrastructure development and job-creating downstream industries. Therefore, the Government of India (GoI) must include it in the list of critical minerals,” the report noted.
The European Union has already classified coking coal as a critical raw material alongside 29 other key materials, including lithium, cobalt, and rare earths essential for green energy.
85% through imports
India currently depends on imports for about 85 per cent of its coking coal needs, significantly higher than the EU’s import dependence of around 62 per cent.
“Given the strategic importance of coking coal, GoI can provide special dispensation to boost its domestic production and ensure coking coal security for the steel sector,” the report added.
In FY 2023-24, Integrated Steel Plants (ISPs) imported 58 million tonnes (MT) of coking coal at a cost of approximately Rs1.5 lakh crore, despite India having 5.13 billion tonnes of prime coking coal and 16.5 billion tonnes of medium coking coal as proven geological resources.
The report flagged the poor performance of public-sector washeries, which operated at less than 32 per cent capacity utilization in FY 2022-23, with washed coal yields at just 35-36 per cent. In contrast, private coking coal washeries achieved over 75 per cent capacity utilization and significantly higher yields.
The report also recommended amending the Coal Bearing Areas (CBA) Act, 1957, to allow Special Purpose Vehicles (SPVs) under the public-private partnership model to remain deemed lessees of the Jharkhand government even after transferring majority shares to private entities.
Additionally, it called for policy changes to enable joint venture companies to sell byproducts (middling and tailing) from coking coal washeries. “Profits from these byproducts should be passed on to steel plants as reduced coking coal costs, which is vital to lowering the price of washed clean coal,” it stated.
