How Coal impacts Steel production?

Posted on December 19, 2011 by

Coal is the main primary component in steel and power production. The world is reliant on coal for these two purposes mainly. It is estimated that, almost 70% of the steel produced today uses coal. As the growing economy is voracious to steel; coal has become the crucial element in increasing steel production. Metallurgical coal (Coking coal), is a vital ingredient in the steel making process.

Coal accounts for 55% of India’s energy need and mostly found in the eastern and the central regions of the country. Developing countries like India, China and other major developed and developing economies are able to utilise large indigenous coal reserves to contribute their rapid growth, while coal is also available from a wide variety of sources in a well-supplied worldwide market.

Coal production in India

Coal India Ltd is the main producer of coal in India. As per the data indicated by CIL, the targeted coal production left a gap more than 60 MMT at the end of year 2012.

Indigenous coal availability and requirement

Indigenous coal availability and requirement, Source: CEA

Indigenous coal supply of India is not reliable. It can be proved from following news – Tata Power (India’s largest power company in the public sector) signed a contract in 2007 with an Indonesian coal company to buy 10 Mt of coal annually. This contract entitles Tata Power the right to buy 10 Mt of coal annually. In addition, Tata Steel entered in a MOU with Riversdale Mining (Riversdale Mining is an Australian mining company) and acquired a 24 % stake in it in 2007.  If the Indian coal supply was reliable and vast, why sign such an import contract?

Slow clearance of projects due to Environment and Forest clearance for the Coal mines, Delay in granting prospecting license, Land acquisition, and Rail transportation of coal are the main reasons behind the slow development of coal blocks in India which eventually impacts the overall coal production.

Know more about – Impact of Climate Change on Global Coal Production – Emphasis on Indonesia

Posted in: Sustainability