Taking stock: India’s Metallurgical Coal and Coke demand and supply outlook Presented By: R.Nagarajan ED(Services) RINL/VSP

COAL Uniformly distributed around the globe 29% Global Prime energy 41% Global Electricity China accounts for half of global consumption India is the largest growth market and consumption expected to double to 20% by 2035 Metallurgical coal has a skewed distribution across the globe and is concentrated mainly in China, Australia, Canada, Mongolia, Russia and Mozambique Global steel production is dependent on coal either for energy in EAF or as primary raw material source for steel making through BF-BOF route

COKING COAL PRODUCTION & IMPORTS China accounts for 611.MT of coking coal production – largest in the world Australia, the second largest produced 191.1MT Australia is also the largest exporter accounting for 65% of wolrd coking coal exports India is the largest importer of coking coal (17% share in world Import Market) next only to Japan China imports share is at 15% and Korean at 11% Over the last few years steel production surged by 36% while coking coal imports have gone up by 65% in India. 80% of coking coal consumption in India is being Imported Metallurgical coal imports in India 2016 50 MT 2015 43.7 MT 2014 36.8 MT 2013 25.5 MT 2012 31.8 MT Metallurgical coal imports in India 2020-21 75 MT 2030-31 160 MT

COKING COAL PRODUCTION & IMPORTS Coal India Limited (CIL):- - Produces 50MT coking coal annually - Only 5MT is washed and supplied to steel industry, rest is supplied to power sector and others - plans to increase production and washery capacities - plans to make at least 15 MT coking coal available for steel industry in the next 4-5 years Imported coking coal is of better quality but the constraints are - Price volatility - Unreliable supplies Merchants coke producers unable to bear the cost are operating at 1/3rd of their capacities Large coke plants associated with integrated steel plants are unable to pass on the increased cost to consumers

COKING COAL PRODUCTION & IMPORTS Price trend:- - Pricing of ICC has moved to increasingly shorter term from annual pricing to Quarterly benchmarking and further to index based mechanism - Chinese buying the coal in spot market are largely influencing the Index Based Pricing Coking coal HCC ($/t) +/- % on   previous quarter  PCI/HCC Semi-soft ($/t Jan-Mar 2013 165.00 -2.94% 117.00 Apr-Jun 2013 172.00 4.24% 121.00 Jul-Sep 2013 145.00 -15.70% 105.00 Oct-Dec 2013 152.00 4.83% 105.50 Jan-Mar 2014 143.00 -5.92% 103.50 Apr-Jun 2014 120.00 -16.08% 90.00 Jul-Sep 2014 n/a 89.00 Oct-Dec 2014 119.00 -0.83% 87.00 Jan-Mar 2015 -1.68% 86.00 Apr-Jun 2015 109.50 -6.41% 81.00 Jul-Sep 2015 93.00 -15.7% 74.00 Oct-Dec 2015 -4.3% 71.00 Jan-Mar 2016 -8.99% 66.00 Apr-Jun 2016 84.00 3.70% 70.00 Jul-Sep 2016 92.50 10.10% Oct-Dec 2016 200.00 116.22% 130.00 Jan-Mar 2017 285.00 42.50% 171.00 Apr-Jun 2017 193.50 -32.11% 126.00

COKING COAL PRODUCTION & IMPORTS Future trends:- - Coke quality is getting more prominent with increasing size of blast furnaces and technology upgradation - Following table shows the size of BF coming up in the next 10-15 years, all are high volume which impose stringent quality control on coke

HINDRANCES IN USAGES OF INDEGENOUS COAL High ash Low coking properties High inerts resulting in poor M10,M40 ,CSR ,CRI Logistics Even after reducing ash of Indian coking coal through several beneficiation processes they cannot replace ICC unless the vital parameters MMR, Fluidity, Ash Chemistry etc. suit the requirement.

Steel demand is expected to grow to 255MT by 2030-31 ROAD MAP FOR INDIAN STEEL INDUSTRY Government of India has brought out the National Steel Policy 2017 with an objective to create a Self-sufficient Steel Industry that is technologically advanced, globally competitive and promotes inclusive growth. The policy aims at:- -Building a globally competitive Industry with a Crude Steel capacity of 300MT by 2030-31. -Increasing per Capita Steel Consumption to 160 Kgs by 2030-31. Steel demand is expected to grow to 255MT by 2030-31 -Explore Coal assets abroad -Utilization of the Make in India initiatives National Steel Policy-2017 envisages a requirement of - 161 MT of Coking Coal - 31 MT of Coal for PCI by 2030-31. The present level of PCI which is around 50-150 Kg per ton of HM has to increase to 180-200 Kg BF Coke rate from 450-600 Kg has to be reduced to 300-350 Kg per ton of HM. Increased domestic availability of washed coking coal and decrease import dependence from 85% to 65% by 2030-31 INDEED, IT IS A CHALLENGING TASK FOR INDIAN STEEL INDUSTRY, PARTICULARLY PUBLIC SECTOR.

CRUDE STEEL PRODUCTION IN 2016 World Crude Steel Production 1630 MT China 808 MT Japan 105 MT India 96 MT((Capacity 126.33 MT)) USA 79 MT

METALLURGICAL COKE PRODUCTION OF CHINA & INDIA

DEMAND & SUPPLY OF METALLURGICAL COKE Total metallurgical coke production in India is around 35MTPA Merchant coke producers contribute 3-5MTPA -Integrated steel plants contribute the rest Imported coke- 3.1MT in 2015-16 100 MT OF COKE REQUIRED BY 2030-31 TO CATER TO 255MT PRODUCTION OF CRUDE STEEL

Coking Coal import at RINL Indigenous Coal usage at RINL INITIATIVES AT RINL For RINL, coal selection has been the thrust area to ensure the coke making unit to produce coke meeting the demands of blast furnace while also taking care of the Coke Oven Battery health. Coking Coal import at RINL 2016-17 3.8MT 2015-16 4.15MT 2014-15 Indigenous Coal usage at RINL 0.36MT 0.40MT 0.59MT RINL uses MCC in the Coal Blend. Considering guaranteed ash content of 20 % in MCC, Blend is formulated to increase MCC% keeping minimum CSR requirement for Coke Quality in BF. Beyond 15 % MCC in the blend, coke CSR falls below 64 which is the minimum requirement for injection of PC in BF to the extent of 100 Kg and beyond.

INITIATIVES AT RINL With several years of coke making experience in 7-meter tall slot battery, RINL-VSP coined the idea of introducing the straight coal i.e. coal from a single source/mine head into its blend. The basic reasons for VSP to try for such an option are;   - To have cushioning on cost & logistics - More flexibility in blending - Obtain accuracy in target blend property - Tailoring coke quality to different requirements - Flexibility of supplier base

SUMMARY Coke quality has always been a subject of prime importance for a stable, efficient and consistent blast furnace operation Stringent requirements on the quality of coke for furnaces operating at higher top pressure (>2kg/cm2) Apart from having low ash content and good room temperature strength indices like M10 and M40, coke should exhibit superior high temperature properties like CSR (Coke Strength after Reaction) and CRI (Coke Reactivity Index). Production of High CSR coke needs high quality coking coals which are not available in India. Due to inferior coking property, Indian coking coal solely cannot be used to produce coke as required

SUMMARY Mitigation of above difficulty needs strong policy initiative and commitment from all Concerned on the following. Large Scale beneficiation of indigenous coking coal Joint task group with MoS & CIL to conduct R&D and training activities on beneficiation and coking technology Use of optimization model to reduce cost and increase import substitution Formulation of cost effective indigenised (Higher use of indigenous coking and non-coking coal) blends by pilot and commercial study and research works.

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