Diversify, innovate and decarbonize coking coal for India's steel vision

India must achieve material security, cost competitiveness and sustainability goals through policy and technology levers for coking coal.

In brief

• India’s steel vision 2050 is heavily reliant on coking coal, while the global supply-demand is set to decline
• Demand side interventions would include improving manufacturing efficiencies and adopting alternative technologies
• Supply side interventions would include increasing domestic mining and logistics infrastructure and diversification of import sources across the globe

The global coking coal market is poised for significant shifts between 2023 and 2050, influenced by decarbonization efforts and market dynamics. India’s demand however would continue to increase from 80 MT in FY 24 to 150 million MT by 2050, due to the dependency on BF route for the expansion plans. India’s metallurgical coal production stood at 65 million metric tons in FY24. While this could cross 200 million metric tons by FY50, the quantum of usable coking coal for steel might not cross 30 million metric tons from the current usable volumes of 5 million MT in FY24. Therefore, our reliance on imports would continue for the foreseeable future. Our imports stood at 75 million metric tons in FY24, addressing ~95% of our demand. This is expected to reach 115 million metric tons by FY30 and could double to ~150 million metric tons by FY50, if our decarbonization efforts do not meet the desired outcome. Our steel vision of 300 million MT by 2030 and 500 million MT by 2050 is also bound by three dimensions: material security, cost competitiveness and sustainable manufacturing. This needs significant effort in coking coal demand and supply. This report outlines demand and supply trends under different scenarios, emphasizing key insights and their implications for the sector.

Advancing sustainability in coking coal

India must take a unified approach of lowering carbon emissions, highlighting the essential role of technological innovation in coking coal and use of AI-ML in steel production. Such interventions can help in significantly reducing the demand of coking coal in a declining global market. Exploring alternate technologies in steel and increased adoption would be the prime driver to reduce coking coal demand. Advancements in manufacturing efficiencies in blast furnace through AI-ML technologies and innovative blends using semi coking coals available in India would optimize the fuel rates and the need for imported coking coal while also moving towards sustainability goals. Furthermore, the adoption of advanced tools—such as IoT, RFID, drones and predictive analytics—enhances operational efficiency in mining through real-time monitoring, leading to lower emissions and improved throughput. While the above initiatives would address the demand and supply scenario, mining activity demands continued focus on air/water quality improvement, reclamation and eco-park development and other renewables and energy efficiency practices from a sustainability perspective.

India towards Atmanirbharta in coking coal supply

Achieving Atmanirbharta in coking coal is not just about improving domestic capabilities, but also about diversifying imports across geographies. The report identifies three key strategies to support India’s self-sufficiency in coking coal. As part of Path 1, the government has set an ambitious target of achieving 140 million tons (MT) in domestic coking coal production by FY 30.  This goal is supported by policies promoting private-sector involvement, including the auction of 10 coking coal blocks, and investments in new washeries to improve coal quality for steel production. The Smart Coal Corridor initiative further enhances logistics efficiencies, saving INR21,000 crore annually and reducing emissions from related operations. Path 2 focuses on improving India’s semi-hard coking coal usability, with a goal of reaching a 30% blend ratio that could provide an additional 40 MTPA to 50 MTPA from domestic sources. This goal would be supported by two key interventions—enhancing washeries to increase the use of Indian coking coal and implementing AI-ML approaches to expand blending options with imported prime and semi-hard coals. Path 3 focuses on diversifying imports across geographies, While the share of imports from Australia has gone down, the volumes will keep going up for it to evolve from a supplier to partner. This needs to be augmented by continued increase in volumes from other existing sources like Russia and Mozambique apart from exploration of new options like Mongolia.

Way forward

Government and industry must collaborate on expanding domestic production, enhancing infrastructure, adopting advanced technologies and ensuring sustainable practices to strengthen energy security and efficiency.

Government should:

• Focus on improving domestic supply through:
  • Intensify exploration activities to identify new coking coal reserves
  • Expedite auctioning process to allocate new mines private sector players and
  • Invest in infrastructure and technologies to enhance mining efficiency and washing capacity
  • Improve logistics and transportation infrastructure to facilitate efficiencies

• Focus on driving supply and demand through policies to support:
  • Favourable policies and fiscal incentives to attract investments in coking coal
  • Incentives for technology upgrades towards efficiency and green steel technologies
  • Diversification of coking coal imports India for energy security and price stability
  • Regulatory framework to ensure focus on sustainability and efficiencies 

Industry should:

• Innovate and adopt advanced technologies and AI-ML across the value chain:
  • Alternate steel manufacturing technologies
  • Blast furnace efficiency improvement
  • Innovative blends in coke manufacturing
  • Productivity and sustainability in coking coal mining 

• Co-operation and collaboration across stakeholders: 
  • Strategic alliances for consolidating buyer power in global market
  • Partnerships with global coal suppliers to diversify import sources
  • Collaborate with large and mid-market players through joint R&D and knowledge sharing
  • Co-investment and joint R&D with academia for new technologies 

The above recommendations are not options or choices but must be considered mandatory. Effort in each of the above is non-negotiable to meet India’s steel vision.