CIL looking abroad for coking coal.
Despite few aborted projects, Coal India Ltd. (CIL) once again hit the road scouting for coal assets in Mozambique, Russia and Indonesia. However, considering the glut of thermal coal available domestically in India, the miner, accounting for more than 80% of the country's coal supplies, would primarily focus on acquiring coking coal assets. Officials in CIL said given the backdrop of projected rise in steel production in the country and severe limitations of ramping up coking coal availability from domestic resources, CIL's overseas acquisition strategy would be pinned on coking coal.
According to the Ministry of Coal, domestic coking coal production could not be ramped up in the short and medium term and in the best case scenario, local production would touch the 71-million-metric-tons-per-year (mtpy) mark by 2020. The ministry maintained that with current coking coal production pegged at 54 million mtpy, geological challenges and limitations of metallurgical grade coal reserves in the country, it would be extremely challenging to meet higher demands from domestic sources as sought by the local steel producers. The Ministry of Coal's stand was in response to the Ministry of Steel, which pointed out that Indian coking coal imports in the current fiscal year would be around 50 million mt against 43 million mt shipped during 2015-2016 and projected to touch 180 million mt by 2025, if India was to achieve total steel production of 300 million mt, the official said.
It was against this backdrop that CIL had approached the government of Mozambique to allot a new high-grade coal asset to the Indian miner. This comes within one month of CIL formally relinquishing coal blocks in the Tete province of Mozambique after the miner's initial prospecting investments failed to find any viable fuel that could be categorized as coal, a CIL official said. Last month, the board of directors of CIL formally approved a move to surrender prospecting license numbers 345L and 3451L granted to Coal India Africana Limitada, CIL's African subsidiary to the government of Mozambique.