Steel industry may witness increased supply of coking coal from Coal India, aiming to capitalize on untapped market opportunities
In a significant move to support the nation's energy needs and reduce imported coal dependence, Coal India Ltd., India's largest coal producer, has announced plans to increase the availability of coking coal for the country's steel sector.
The company aims to supply 900.24 million tonnes of coal in FY 2025-26, marking an over 18% increase from the previous year. This move will not only bolster the power sector but also non-power sectors such as steel.
Specifically for the steel sector, Coal India intends to offer more coking coal and cater to coal requirements for emerging coal gasification projects, which are crucial for the steel industry's raw material needs.
To achieve this growth, Coal India plans to invest heavily, with a capital expenditure of ₹16,000 crore focused on growth initiatives. The strategy includes:
- Selective mining and coal beneficiation and blending, improving the quality of produced coal including coking coal.
- Enhancing production from underground mines.
- Diversifying into cleaner coal technologies such as coal gasification and coal-to-liquid processes, which can benefit downstream steel production processes.
The Indian government supports these efforts through regulatory reforms and mining auctions, indirectly boosting Coal India’s ability to boost coking coal output.
Coal India possesses vast geological coal resources, with 389.42 billion tonnes at its disposal, including 212 billion tonnes of proven reserves. However, India has limited availability of high-quality coking coal, making this shift in focus crucial.
During FY25, against an offer of about 3.36 million tonnes to the steel sector, 2.39 million tonnes were booked with a premium of 5.28% over and above the floor price. This demonstrates the demand for high-quality coking coal in the domestic market.
Coal India's production in the last financial year was 781.06 million tonnes, with a volume increase of 7.41 million tonnes over the previous financial year. The company's mine development priorities align with India's thermal energy needs, making it a key player in the nation's energy sector.
In the previous fiscal year, Coal India's coal supply to the non-regulated sector peaked at 145.3 million tonnes, registering an 8.1% year-on-year growth over FY24. The company's vision is to ensure no coal shortage in the country, providing a reliable and steady supply to meet the nation's energy needs.
Apart from the coal sector, Coal India has allocated a significant portion of its planned capex towards critical minerals, coal gasification, thermal power plants, and renewable energy portfolio. This diversification reflects the company's commitment towards national developmental goals, considering the country's commitment towards Net Zero.
The article was published on August 4, 2025. Coal India aims to be a commercially viable, contemporary, and professional organization that is consumer-friendly and aligned with national developmental goals.
In summary, Coal India's plans to increase coking coal availability for the steel sector focus on scaling up supply, improving coal quality through beneficiation, leveraging underground mining, and supporting alternative coal technologies, backed by significant capital investment and alignment with national objectives to reduce imported coal dependence.
- Coal India's plans to increase coking coal availability for the steel sector aim at scaling up supply, catering to coal needs for emerging coal gasification projects.
- To achieve this goal, Coal India plans to invest heavily, with a capital expenditure of ₹16,000 crore focused on growth initiatives.
- The strategy includes selective mining, coal beneficiation and blending, enhancing production from underground mines, and diversifying into cleaner coal technologies.
- The Indian government supports these efforts through regulatory reforms and mining auctions, indirectly boosting Coal India’s ability to boost coking coal output.
- The Indian government's support also allows Coal India to maintain a reliable and steady supply, ensuring no coal shortage in the country.
- In the steel industry, the demand for high-quality coking coal in the domestic market is evident, as shown by the 5.28% premium over and above the floor price in FY25.
- Apart from the coal sector, Coal India has allocated a significant portion of its planned capex towards critical minerals, coal gasification, thermal power plants, and renewable energy portfolio, reflecting the company's commitment towards national developmental goals and the country's commitment towards Net Zero.
