India: Logistics a key challenge, says coal ministry

Logistics have been a challenge, admitted Vinod Kumar Tiwari, additional secretary, Ministry of Coal.

Speaking at the national conference on "Making India Atmanirbhar in Steel: Role of Secondary Steel Sector" in New Delhi on Sunday, Tiwari said that in March, 2021, at the end of the financial year, Coal India Limited (CIL) had 100 million tonnes (mnt) of coal while the power plants, 27 mnt.

If inventory goes beyond 60-70 mnt, it is difficult for CIL to maintain inventory. If the stock reaches 100 mnt, then CIL has to backdown on production.If stock piles up, there is the possibility of catching fire.

"On the one hand, power and steel plants are starved of coal and on the other hand CIL is laden with stocks. So, there is a need to sit down with CIL and sort out the stocks pile-up issue,' informed Tiwari.

"Actually, logistics is so finely balanced, that one loose screw can throw the entire chain off balance," he revealed.

The coal ministry has been in talks with the railway ministry which has assured that the present 520 wagons availability will be enhanced by an additional 100 by September this year and 700 by end of the coming fiscal.

"I also request plants close to mines, to set up merry go rounds and conveyors which will reduce their costs in the long term. Coal companies will also have to build logistic infrastructure to reduce the turnaround time. Railways too is expanding its network," he said.

Coal production in sync with steel vision

The steel ministry's vision of 300 mnt of steel production by 2030 is in sync with the government's coal production targets.

Domestic coal production by the PSUs, captive mines and commercial mines will be able to meet the steel industry's requirements. There can be substitution of imports with domestic coal.

Current production of coal in India is around 730 mnt but, this fiscal, it will rise to 780 mnt.

"Power is the largest consuming sector. But instead of looking at the percentage the steel industry should rather look at the quantities of coal it requires in million tonne," he advised.

The coal ministry has done some planning. Captive mines have made huge contributions. "We want both captive and commercial mining to contribute to India's coal production," he said.

Imports reduction

Imports have reduced significantly and will continue to do so. However, India's dependence on imports for coking coal and high-grade thermal coal will continue for some time.

But India will be able to reduce coal imports by around 50 mnt this year. In previous years, it had imported around 250 mnt. This year, 190-200 mnt will be imported which has been made possible by the increased domestic production. Coal India, whose production used to hover around 600 mnt, has increased to 630 mnt, Singareni Collieries Company Limited's (SCCL's) is at 55-60 mnt. Captive mines, which contributed 55-57 mnt, will take this up to 90-100 mnt. "This trend will continue, it is not a one-off event," indicated Tiwari.

Coal gasification PLI policy

Keeping carbon goals in mind, the ministry is mulling a linkage policy for coal gasification.

"We look forward to more innovative technologies that use less coal and cause least pollution," he said. Thus, coal gasification projects will be encouraged. The government is also assessing the need for PLI-linked coal gasification projects and seeks inputs on this from the relevant stakeholders.

Outlook

India requires 960-970 mnt of coal of which 720 mnt is produced domestically and the balance gets imported. However, around 100 mnt in this kitty cannot be substituted domestically, comprising coking coal and high-grade thermal coal.

When India reaches 1 billion tonne of consumption a large portion will comprise domestic coal, Tiwari stressed.

The ministry's planning with Niti Aayog and other agencies give a demand projection of 1.3-1.5 billion tonnes by 2030. "Our projection with coal companies is 1.7 bnt. So, when India's crude steel installed capacity touches 300 bnt, there will be enough domestically produced coal. And all the production will be done in an environmentally sustainable manner, moving towards our net zero emission by 2070," emphasised Tiwari.