Home » Coal import declines to 209 mt in 2021-22 against 248 mt in 2019-20

Coal import declines to 209 mt in 2021-22 against 248 mt in 2019-20

by Team Indopost
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India has produced 51.7 Million Ton (MT) raw coking coal during the financial 2021-22 which is 15 % more as compared to 44.8 MT during FY21. Domestic raw coking coal production continues to witness increasing trend in the current fiscal as well with production of 8.3 MT, as per the figures up to May 2022, which is 20% more compared to 6.9 MT during the same period of the previous year. At present, domestic raw coking coal washing capacity is about 23 MT per annum including 9.26 MT of the private sector. Coal India Ltd.(CIL) is planning to set up and operationalize nine more new washeries with a capacity of 30 MTPA. With setting up of new washeries, it is estimated that CIL will be able to supply about 15 MT of washed coking coal to the steel sector, thereby reducing import of coking coal. There is need to set up more washeries to enhance capacity to meet the fast increasing demand of coking coal in the country. During FY 22, CIL supplied 1.7 MT washed coking coal to the steel sector and has set a target of 3.45 MT during FY23. To further enhance raw coking coal production, the Ministry of Coal has auctioned 10 coking coal blocks to the private sector with a PRC of 22.5 MT during the last two years. Most of these blocks are expected to start production by 2025. The Ministry has also identified four coking coal blocks and the Central Mine Planning and Design Institute (CMPDI) also will finalize GR for 4 to 6 new coking coal blocks in the next two months. These blocks may be offered in subsequent rounds of auction for private sector to further step up domestic raw coking coal supply in the country. CIL has planned to increase raw coking coal production from existing mines up to 26 MT and identified nine new mines with PRC of about 20 MT by FY 2025. Also, CIL has offered six discontinued coking coal mines, out of the total 20 discontinued mines, on an innovative model of revenue sharing to the private sector with expected PRC of about 2 MT. With these transformative measures taken by Ministry of Coal under ‘Atmanirbhar Bharat’ initiative of PM, domestic raw coking coal production is likely to reach 140 MT by 2030.

India has a balanced energy basket and coal sector is an important contributor in fulfilling nation’s energy needs. The sector is not only committed to meet coal demand in the country but also sensitive towards building a sustainable ecosystem. Coal is a critical input for power, fertilizer, iron & steel and cement sector.

 Coal imports, which had reached a peak of 248 Million Ton (MT) in 2019-20, declined continuously during the next two years to 215 MT in 2020-21 and further to 209 MT in 2021-22.  

Despite  steep rise in actual demand of coal from 956 MT in 2019-20 to 1027 MT in 2021-22, coal imports have not increased.  Coal import grew at a compound annual growth rate (CAGR) of 22.86% during the period 2009-10 to 2013-14.  At this CAGR, coal imports would have reached 705 MT in 2020-21 and further to 866 MT in 2021-22. The import of coal could be checked  only by sustaining increased domestic supply over the years.

All India coal production has increased from 716 MT in 2020-21 to 777 MT in 2021-22 resulting in an increase of 61 MT.  Therefore, despite a steep rise in actual demand for coal from 906 MT in 2020-21 to 1027 MT in 2021-22, coal imports could be contained due to increased domestic dispatch from 691 MT in 2020-21 to 818 MT in 2021-22.  

Domestic dispatch has not only increased to the power sector but also to non-power sector  by 101 MT   in 2020-21 to 104 MT in 2021-22. The decline in coal import during 2021-22 is largely due to decrease in import by Power Sector which came down from 45 MT in 2020-21 to 27 MT in 2021-22,  decline of almost 40%. 

The decline is more steep if we compare coal imports by power sector in 2021-22 to pre-covid year of 2019-20 when such import was 69 MT. This is despite the fact that total thermal power generation in the country  increased to 1115 BU in 2021-22 from 1032 BU in 2020-21, an increase of 83 BU in absolute terms and  almost 8 % in percentage terms.    

Coking Coal import was 57 MT with a growth of 11.65% during 2021-22 which is largely used in the Steel Sector. However, as compared to pre-covid year of 2019-20, the growth in coking coal import is around 10 %. Coal imported by Non-regulated Sector (Cement, Sponge Iron & Paper etc) increased to 125 MT in 2021-22 from 119 MT  in 2020-21 an increase of 5.23 %.

Compared to the pre covid year of 2019-22, when imports by non-regulated sector was 127 MT, imports by this sector has actually declined in 2021-22. Thus, increase in import of coal by non-power sector during 2021-22 is largely on account of growth in import of coking coal and import of coal by non-regulated sector which largely import high grade thermal coal. Supply of both these categories of coal are limited in the country.

Meanwhile, the Ministry of Coal,  in view of cleaner environment in coal transportation has given momentum in rail evacuation and also initiating news efforts to gradually move away from  road movement of coal in country.  Planned construction of new broad gauge rail lines in Greenfield coal bearing areas, extending the rail links to newer loading points and  doubling and tripling the rail lines in some cases will  enhance  rail capacity considerably.

PM launched Gati Shakti- Nation Master Plan for Infrastructure development in October 2021 with the objective to bring different Ministries together and for integrated planning and coordinated implementation of infrastructure connectivity Projects. It will incorporate the infrastructure schemes of various Ministries and State Governments and  will also leverage technology extensively including spatial planning tools.

In line with the goal of PM Gati Shakti, the Ministry of Coal has undertaken 13 Railway Projects to develop multimodal connectivity and identified missing infrastructure gaps for each projects. Four Railway projects are successfully mapped in the NMP portal under High Impact projects which will be developed in the States of Jharkhand and Odisha and will facilitate movement of coal with rapid logistics and wider connectivity for all the commercial miners.

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