Lok Sabha Question No. 1452 (UNSTARRED), answered on 2018-12-19
Subject: Demand and Supply of Coking Coal
Ministry: COAL
Asked by: SHIVKUMAR CHANABASAPPA UDASI, SHOBHA KARANDLAJE, PRATHAP SIMHA

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA UNSTARRED QUESTION No. 1452

TO BE ANSWERED ON 19.12.2018

## Demand and Supply of Coking Coal

## 1452.  SHRI SHIVKUMAR UDASI: KUMARI SHOBHA KARANDLAJE: SHRI PRATHAP SIMHA:

## Will the Minister of COAL be pleased to state:

- (a) whether the entire demand of Coking Coal is not met indigenously as the  supply  of  high  quality  coal/coking  coal  (LOW-ASH-COAL)  in  the country is limited and whether India is expected to become the largest coal importer through sea route by 2022;
- (b) if so, the quantity of Coking Coal imported into the country during the last three years and the current year, year-wise;
- (c) the impact of the cost of coking coal on the steel producers;
- (d) the measures being taken by the Government to improve the supply of coking Coal in the country;
- (e) the  number of  Coking  Coal  Washeries  in  the  country,  including  their capacity  and  number  of  Washeries  CIL  proposes  to  construct  by  the year 2020; and
- (f) the steps taken for rationalizing the procurement procedure for Coking Coal, acquisition of Coking Coal mines abroad and optimizing the use of Coking Coal by the steel companies?

## ANSWER MINISTER OF COAL AND RAILWAYS

## (SHRI PIYUSH GOYAL)

(a): The entire  demand of coking coal is  not  met  indigenously  as  the  supply  of  high quality coal/ coking coal (low-ash-coal) in the country is limited and thus no option is left but to resort to import of coking coal. As per the current import policy, coal is kept under Open General License (OGL) and consumers are free to import coal from the source of their choice as per their contractual prices on payment of applicable duty. Further,  CIL  has  a  plan  to  augment  supply  of  Coking  Coal  through  washed  coking coal.  The  imported  quantity  of  2017-18  at  208.27  MT  is  less  than  the  imported quantity  of  2014-15  which  stood  at  217.78  MT  even  as  power  generation  and industrial activity grew substantially after 2014-15.There has been a consistent effort to increase domestic coal production so as to reduce dependence on coal imports. The all India raw coal production has increased from 565.77 MT in 2013-14 to 676.48 MT in 2017-18. Absolute increase in all India coal production from 2013-14 to 2017-18 (four years) is 110.71 MT as compared to increase of coal production of 33.73 MT from 2009-10 to 2013-14 (four years).

Coal India Limited (CIL) has also increased its production from 462.41 MT in 2013-14 to 567.36 MT in 2017-18 (four years), an absolute increase of 105 MT as compared to increase of coal production of 31.15 MT between 2009-10 and 2013-14 (four years).

Further, in the current year during April-November, 2018, all India coal production was 433.90 MT with a growth rate of 9.8% and coal production of CIL was 358.32 MT

with a growth rate of 8.8% over the corresponding period of previous year.

The focus of the Government is on increasing the domestic production of coal which includes  efforts  to  expedite  Environment  &  Forest  clearances,  pursuing  with  State Government for assistance in land acquisition and coordinated efforts with Railways for movement of coal.

However,  coking  coal  will  continue  to  be  imported  as  there  is  limited  availability  of coking coal in the country. Further, power plants designed on imported coal will also continue to import coal.

Hence, it cannot be assumed that India will become the largest coal importer through sea route by 2022.

(b): Thequantity of coking coal imported during the last three years and current year 2018-19 is given below:-

| Import of Coal -Mte   | Import of Coal -Mte   |
|-----------------------|-----------------------|
| Year                  | Coking Coal           |
| 2014-15               | 43.71                 |
| 2015-16               | 44.56                 |
| 2016-17               | 41.64                 |
| 2017-18 (P)           | 47.00                 |
| 2018-19 upto Sept. 18 | 25.94                 |

(c): An increase in cost of coking coal will increase the cost of production of steel.

(d): CIL  is  continuously  searching  for  coking  coal  assets  coming  up  for  sale  in  the global market and identifying suitable assets for acquisition. Further,CIL proposes to construct 8 more coking coal washeries by 2020 having a total capacity of 26.5 Mty.

(e): The number of coking coal washeries being run in CIL is 12, with a total capacity of 22.18 Mty (Old Washeries -20.58 Mty& New Washery 1.6 Mty) and 04 being run by Private Sector with a capacity of 7.70 Mty. CIL proposes to construct 8 more coking coal washeries by 2020 having a total capacity of 26.5 Mty.

(f): Procurement of raw materials like coking coal is entirely done by individual Steel companies  taking  into  account  their  installed  capacity,  requirement  of  the  raw materials,  commercial  consideration  and  market  dynamics.  India  is  deficient  in techno-commercially  extractable  coking  coal  reserves.  The  import  dependence  of Indian  Steel  sector  on  coking  coal  will  continue  in  foreseeable  future.  At  present, majority of coking coal is imported to India from Australia, followed by Canada and USA in terms of quantum of import. In view of this scenario, CIL has taken initiatives to acquire coking coal assets abroad, with particular focus in Australia and Canada, with a view to import the produces to India and enhance raw material security of the country. Certain assets have been identified which are under different stages of due diligence.

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