India to diversify coking coal sourcing beyond Australia: Scindia

India is looking to diversify its coking coal sourcing beyond Australia — the largest supplier. While it has entered into an MoU with Russia; Mongolia could be another possible sourcing nation. Ramp up of sourcing from Mozambique is also being planned, Union Steel Minister, Jyotiraditya Scindia said.

Scindia said logistics and transport costs from some places are quite high and the Ministry is working these out, especially for Mongolia.

Coking coal is a key steel-making raw material and India, the second largest crude steel producer, is also one of the largest importer the feedstock material. In FY23, India’s coking coal imports were to the tune of 55 mt.

Ramping up production

In Mozambique, plans are being worked out to ramp up production from the existing 1.7 million tonnes per annum (mtpa). India — through SAIL and its other partners — owns three mines, namely Benga, Zambeze and Tete East. Of these, only Benga is operational. However, coking coal produced at Benga is not available as an open market product because of high ash and sulphur. Therefore, back-to-back arrangements with promoter companies is required.

Also read: Russia overtakes Australia as top supplier of pulverised coal injection to India since September

“There are plans to increase production from Benga as part of our plans to ramp up production from Mozambique. We are looking at Mongolia too. But there are issues regarding the cost of transportation,” he said while listing the achievements of the Ministry between 2014 and 2023.

“We have entered into an MoU with Russia, and some (coal) shipments have started coming,” Scindia added.

“With steel production expected to double, iron ore requirements will also go up from 256 mt to 400 mt; while coal (coking) requirements could go up 50–60 per cent. So we do need to diversify our resource base,” the minister said.

CVD on Steel

According to Scindia, the ministry has already received one or two cases where excess production of a “particular country” is coming into India.

The Ministry is “studying the matter” before putting forward its recommendations on imposition of counter-vailing duties or import duties on such steel shipments.

The steel industry has been raising the issue of increasing imports from China impacting domestic price and demand. Accordingly it has sought reimposition of CVD on steel from the nation.

Also read: Europe, Middle East emerge key buyers in April as steel exports increase 13% in April 

In FY23, India’s steel exports were around 10 mt (including scrap) while import was around 6 -7 mt.

Scindia, without naming China said, “We are a net exporter and most of the imports are primarily for speciality offerings. There have been some instances were excess production of one country is finding its way to India because of a lack of demand there. These volumes are limited. But, we are studying it.”

Carbon Tax

On the issue of Carbon Border Adjustment Mechanism (CBAM), the minister said the task force is expected to come up with suggestions over the next two-odd months. Indian steel mills need to “proceed with alacrity” on CBAM and green steel.

While steps are to be taken towards de-carbonisation, CBAM is a reality for the country and the world.

He added that although there is “no clear nomenclature” on green steel, mills need to start exploring greener options and use of renewables in steel-making.

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