By Sumita Layek

June 27, 2022 - The Indian government has set a target to reach 140mn t of raw coking coal production by the 2030-31 fiscal year, up by 170pc from output in the 2021-22 year ended 31 March, to cut the country's reliance on imports.

The country produced 51.7mn t of raw coking coal during 2021-22, up by 15pc from a year earlier. Domestic raw coking coal washing capacity is currently about 23mn t/yr, including 9.26mn t/yr operated by the private sector. Coal washing involves the removal of impurities from coal to comply with environmental standards and make the mined product suitable for further use.

April-May coking coal production this year was 8.3mn t, higher by 20pc from the previous year.

State-controlled producer Coal India plans to increase raw coking coal production from existing mines to 26mn t and has identified nine new mines with peak rated capacity of 20mn t by 2024-25. It has also offered six discontinued coking coal mines to the private sector with expected peak output capacity of about 2mn t.

CIL supplied 1.7mn t of washed coking coal to the steel sector in 2021-22 and has set a target of 3.45mn t in 2022-23. It is planning to set up nine new washeries with a capacity of 30mn t/yr, which will supply about 15mn t of washed coking coal to the steel sector.

The coal ministry has auctioned 10 coking coal blocks to the private sector with peak rated capacity of 22.5mn t in the past two years, most of those will start production by 2025.

India's coking coal imports during 2021-22 rose by 4.5pc from the previous year to 51.65mn t, with Australia accounting for the bulk of shipments. Indian steel mills are reliant on imported coking coal as domestic production has higher ash content than their requirements.

The Argus premium low-volatile hard coking coal index hit a record high of $698/t on 11 March and averaged $337.74/t in 2021-22, up by 159pc from a year earlier because of supply concerns and firm global demand.

Domestic mills reached out to the government last month to look into the volatility in coking coal prices. The government cut the 2.5pc import duty for coking coal to zero last month. But the reduction will only provide a relief of $10-12/t on costs, according to a steel producer.

India aims to achieve 300mn t/yr of steel capacity by 2030 under its national steel policy.