Govt working on policy to offer washed coking coal to steel sector

Coal Ministry Additional Secretary M Nagaraju said on Friday the Centre is working on a policy to offer washed coking coal to the steel sector as it aims to reduce imports of the dry fuel.

Addressing a FICCI event, Nagaraju noted that the Indian coal sector is witnessing a robust growth reaching to around 1 billion tonnes of coal production in FY24 with a CAGR of 11 per cent in the last 2 years.

“Next year, we will produce around 1,100 million tonnes of coal,” he said adding, that the government has launched the coking coal mission with a target of producing 140 million tonnes by 2030.

The government will set up 8 coking coal washeries to meet the demand of the steel sector. “By 2029-30, we should have the capacity to produce as much as the country demands for coal and be in a position to supply the coal to other countries,” he emphasised.

For the steel sector, Nagaraju stated that the government is working on a policy for the steel sector where washery route will be applied as the end-route for coking coal thereby reducing import dependence. “We are finalising the policy, once approved, we will be able to offer washed coking coal to the steel sector to blend with the imported coal,” he added.

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Highlighting the importance of coal gasification, he asserted that the government has already initiated a scheme with ₹8,500 crore to support both private and public sector to set-up coal gasification plants in the country. “There is tremendous potential for the country to venture and diversify coal,” he added.

Coal gasification

Railway Board Executive Director (Coal), Avinash Kumar Mishra said that coal gasification will take some time to establish itself and Railways will be offering specialised wagons for its transportation.

With the increase of production of coal, the dependence on imported coal is likely to come down which will benefit the industry as well. There has been a steep surge in coal availability in the last two years which is mostly due to imported coal, he added.

Steel Ministry Economic Advisor Ashwini Kumar said the Indian steel industry contributes around 2.5 per cent to GDP but has strong backward and forward linkages: “There is a need to develop indigenous technology in coal gasification that will give a big boost to the sector. We can expect robust growth in the medium-term in the global steel industry. Despite slowdown in the global steel industry, Indian steel industry is in a healthy state.”