Steel Ministry seeks 12 coal washeries from Coal India

KOLKATA (miningweekly.com) – At the behest of India’s Steel Ministry, Coal India Limited (CIL) has agreed to set up 12 coking coal washeries to augment supplies to domestic steel mills.

In view of the new National Steel Policy, which envisages ramping up India’s steel production to 300-million tons a year by 2030, the Steel Ministry had prodded its counterparts in the Coal Ministry to push CIL to take “quick decisions” on setting up the washeries.

It is estimated that setting up more washeries will reduce India’s import dependency of coking coal by at least 25% to 30%, a Steel Ministry official said, adding that the CIL board would decide on investment, location and capacity details.

At the same time, the Coal Ministry has made it mandatory for bidders at the forthcoming auction of six coking coal blocks to set up washeries once investors are successful in securing the blocks through competitive bidding, the official said.

The six coking coal blocks will be put up for auction, as already announced for captive consumption of steel sector.

However, the bid document will stipulate that all successful bidders will have to set up coal washery units as no ‘unwashed’ coal would be permitted to be used by their respective end-use plants, the official said.

It was also pointed out that on successfully securing a coking coal block and setting up a linked coal washery, it will also be mandatory for the mine operators to use washery rejects in their own captive power plants and only surplus rejects can be sold exclusively to CIL.

CIL is in the process of setting up 15 new washeries and once operationalised, these will have an aggregate capacity of 112- million tons a year.

According to Steel Ministry estimates, India will import 50-million tons of coking coal in the current financial year. This will increase to about 180-million tons a year if domestic steel production is ramped up to 300-million tons a year as per current coking coal supply trends.