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Coal India likely to replace 85 mt of imported coal in FY21
Coal Insights Bureau
Coal India would realistically be able to substitute 80-85 million tons of imported coal through domestic supplies this year, S N Tiwary, Director (Marketing), Coal India Ltd said at the inaugural session.
Coal ministry had earlier mandated Coal India to replace about 100 million tons of coal this year.
“We are planning for 80-85 million tons of coal which we will substitute this year and will go ahead from there,” Tiwary said.
Coal India has put in place a strategy to reduce coal imports, he said.
The Maharatna PSU has identified domestic coal-based power plants and manufacturers of sponge iron, cement, fertilisers, steel and others, who are importing coal, as its potential customers. Power plants located in the southern part of the country have agreed to substitute imported coal. CIL has also introduced a new category of spot e-auction for importers only.
Despite availability of commercial coal in the market in coming years, Coal India would continue to remain the largest supplier with consistency, Tiwary said.
“Significant share of coal imports to India can’t be substituted by domestic coal,” Tiwary said.
The heterogeneity of domestic coal coupled with thin layers puts it at a disadvantageous position compared to most imported coal making replacement of much of the imports a challenge.
“As international coal was formed through ‘in situ’ (in the original place) method, there is little extraneous elements but the heterogeneous coal, which got formed after trees floated down rivers, sometimes disturbs the end users and they tend to blend some portion of Indian coal with imported coal,” Tiwary said.
The higher grade coal, G4 and above from 5,800 to 7,000 GAR (Gross As Received) is less in quantity whereas most of the coal of grade G8 and below or 5,000 -2,700 GAR is more abundantly available.
“So, despite 148.8 billion tons of proven reserve, still there are imports,” Tiwary explained. Tiwary however added that increase in production of coal at CAGR of 3.66 percent during FY15 to FY20 has helped curb growth of imports.
Technologies picked up by coal users like aluminium makers sometimes force users to procure specific quality of coal and achieve that quality by blending of domestic and imported coal.
Also, several power plants can use only high GCV coal of imported variety.
While imports of coking coal and thermal coal by power plants designed for imported coal have remained stable over the years, it is observed that imports of thermal coal by power plants (based on domestic coal) for blending and also imports by non-regulated sector are responsible for variations in total imports.
Met coal of low ash quality, non-coking high quality coal of 5,500 GCV (40 mt) formed a big chunk of total imports of about 248 mt in FY20.
“If we want to restrict import of coal, should the technology be a parameter so that use of technologies suitable for domestic coal can give impetus to demand? Or technology should be left to the choice of users?”
Coal India to remain dominant player
Coal India would continue to remain the largest supplier with consistency, Tiwary adding that Coal India has put in place a strategy to reduce coal imports.
“Despite the heterogeneity of coal if we can address the consistency of heat requirement of coal users then they will definitely come back to Indian coal and for that we have imposed certain steps like going in a big way to go for first mile connectivity where coal would be directly put into wagons from mines. This First-Mile connectivity will help avoid contamination during the movement of coal.”
