14-Mar-2022: Reduction in import of coking and non-coking coal

Demand of coal is higher than the current level of domestic supply of coal in the country. The gap between demand and domestic supply of coal cannot be bridged completely as there is insufficient availability and reserve of prime coking coal in the country. Further, coal imported by power plants designed on imported coal and high grade coal required for blending purposes is also imported in the country as this cannot be fully substituted by domestic coal as the country has limited reserve of high grade 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. Government of India does not interfere in this matter.

The total actual demand of coal during 2020-21 was 906.13 Million Tones (MT). Out of which total coal import was 215.25 MT which was 23.75% of the total requirement. The details of indigenous production, import and requirement of coking and non-coking coal (actual demand) during the year 2020-21 is as under:-

Coking coal mission has been launched for increase in the coking coal production from present 45 MT to 140 MT by 2029-30. This will help in reducing the import of coking coal as it can be blended with high grade imported prime coking coal for steel manufacturing.

Latest technology e.g. Continuous Miner for underground mines, surface miner for opencast mines, latest HEMMs etc. are already in vogue for production of coal in the country.

9-Nov-2021: Substantial Reduction in Import of Non Coking Coal during this Fiscal

India has been importing coal to bridge the gap between the requirement of coal and the domestic production in the country. The dependence on imports for Coking Coal mainly used in the steel sector has been predominantly due to very limited domestic availability. Thus, import under this category has been largely non substitutable. Even though the import of Coking Coal is non-substitutable, consequent to the sustained effort of the government, in line with mission ‘AtmaNirbhar, the imports of various grades of Non Coking Coal have reduced substantially during the current financial year. The latter includes high GCV thermal coal used for industrial purpose and low GCV that goes for power generation.

In the first five months of the Financial Year 2021-22 i.e. up to August 2021(Firm import data is available up to August,21), the import of all varieties of Non Coking Coal has reduced to 70.85 MT from 84.44 MT during the corresponding months of the financial year 2019-20 representing a decline of about 16.09%. The financial year 2020- 21 is not being taken for comparison purpose due to industrial production getting severely affected during this year because of Covid-19 related restrictions where the decline observed is 21%.

The reduction of imports of low calorific value (low GCV) of Non Coking Coal which is mainly used in power sector is even more significant. During FY 2021-22 upto Aug 21, the imports of such grades of coal have decreased by about 47% to 15.24 MT from 28.69 MT during the same period of FY 2019-20. Due to substantial reduction of import of Non Coking Coal in the current year, the total import of coal has also reduced to 94.15 MT in the period from April to August 2021 compared to 107.01 MT during the corresponding period of FY 2019-20, a decrease of about 12%. This has resulted in considerable financial savings in the current year as coal prices are going up sharply in the international market.

The total domestic dispatch of coal has gone up by 9.44% to 317.69 MT in the current FY upto August, 21 as compared to 290.28 MT in the same period of FY 2019-20. This increase could be achieved despite serious challenges arising out of unprecedented rain in several mine areas this year. The government is continuing all efforts to further enhance the coal production and dispatch. Coal India Limited and other Coal producing Units are all set to ramp up the domestic production.