State-owned CIL will offer coking coal through auction route to other consumers only after it meets long-term supply commitments of the dry fuel to PSUs, including SAIL. The decision on the same was taken in the board meeting of Coal India Ltd (CIL) held last month, an official said. Coking coal will be offered only after meeting long-term commitment of steel plants, including integrated steel plants of SAIL and RINL and other such consumers taking into account those coal fuel supply pacts, the official said. However, the washed coking coal and steel Grade-II coal can be offered for metallurgical purposes, the official added.
SAIL is a prime consumer of coking coal as well as a major customer of CIL’s metallurgical coal.
“While Coal India subsidiaries shall be empowered to decide the reserve price (of coking coal to be offered under e-auction route), upper cap of the reserve price will be on the basis of applicable scheme of e-auction,” the official said. Coking coal is a vital ingredient in the steel making process. The world’s largest coal miner is planning to acquire coking coal mines in Australia as it looks to supplement the requirement of India’s metallurgical coal.
However, the discussions are in a very preliminary stage. India’s dependence on imports is particularly heavy on coking coal. Recognising limited availability of metallurgical coal as an ‘disadvantage’ for Indian steel sector, the draft steel policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and a production of 300 million tonnes of the alloy by 2030-31.
The National Steel Policy aims at achieving increased domestic availability of washed coking coal so as to reduce import dependence on coking coal by 50 per cent by 2030-31.Coal India accounts for over 80 per cent of the domestic coal production.