Government should include coking coal in list of essential minerals: NITI Aayog report

India’s import dependence on coking coal is around 85 percent (a representative figure).

According to a Niti Aayog report, the government should include coking coal in the list of essential minerals and provide special permissions to increase domestic production of the key raw material for steel production.

The report, “Increasing Availability of Domestic Coking Coal to Reduce Coking Coal Imports,” said that given India’s commitment to achieving net zero by 2070, the country’s interests would be better served by fully exploiting India’s proven reserves of medium coking coal (16.5 billion tonnes). for metallurgical purposes.

“The Government of India (GOI) should include coking coal in the list of critical minerals as coking coal contributes approximately 42 per cent to the value of steel, which is an important commodity for infrastructure development and process industries that generate major employment opportunities in India. “, the message says.

The European Union has designated coking coal as a critical raw material, along with 29 other raw materials, including “green energy” minerals such as lithium, cobalt and rare earths.

India’s import dependence on coking coal is about 85 percent, which is significantly higher than the EU’s (about 62 percent).

“As declaring coking coal as an essential mineral in India is justified, the Government of India may grant special permission to increase domestic production to ensure the safety of coking coal for the Indian steel sector,” it added.

In FY 2023-24, Integrated Steel Plants (ISPs) imported 58 tonnes of coking coal worth around Rs 1.5 crore despite having a proven geological resource of 5.13 billion tonnes (BT) of premium quality coking coal and 16.5 billion tons (BT) of medium coking coal.

According to the report, the capacity utilization of CCGT beneficiation plants in the financial year 2022-2023 was less than 32 percent, and the yield of washed (clean) coal was only 35-36 percent.

“This is in sharp contrast to the performance of four private coking coal enrichment plants, which have capacity utilization of 75 percent and higher yields of enriched coal,” it said.

The report also suggests that the government amend the Coal-Bearing Areas Act (CBA) 1957 so that an SPV in public-private partnership mode continues to be treated as a lessee of the Jharkhand government even after transfer of majority stake in the SPV. to the private sector.

According to the report, the coal ministry should make necessary policy changes to allow the joint venture to sell by-products (middlings and tailings) of coking coal preparation plants.

“This is critical to reducing washed clean coal costs, as profits from the sale of these by-products must be passed on to the steel mill in the form of lower coking coal costs,” it said.

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