The Indian government has mooted a proposal to shift the onus for coking coal exploration and production to user industries - steel producers, by putting the coking coal sector under the administrative control of the Ministry of Steel, government officials said on Thursday, January 25. The coking coal sector is under the control of the Ministry of Coal at present.
The officials said that shifting of administrative control will ensure a more integrated planning and development of coking coal resources through direct participation in mining and production of the key raw material by steel companies.
They pointed out that, given the limited proven reserves of coking coal in the country, production costs of the raw material are almost similar to the landed cost of coking coal and hence this is a disincentive for Coal India Limited, the sole supplier in the domestic market, to explore new reserves and increase production.
Indian state-owned steel producer Steel Authority of India Limited already operates captive coking coal mines and, by putting the Ministry of Steel in charge of coking coal mining, an integrated policy could be ensured for more steel companies to explore and bring into operation more coking coal resources on their own, the officials said, adding that such a policy will also aim to reduce the import dependency of local steel mills.
Indian coking coal imports during the fiscal year 2017-18 are likely to exceed the 50 million mt mark, up from 41.6 million mt shipped in last fiscal year, despite high international prices, according to a government forecast.