India has the forth largest proven reserve of coal. Though India has 257.38 billion tonnes of reserve, Indian coal is of poor quality, with high ash content. Nearly 83% of Indian coal reserve is of non-coking variety. Out of the 456.4 million tonnes of coal produced in 2008, power, steel and cement sectors accounted for 77%, 4% and 3% of the offtake respectively. 57% of India’s coal import in 2008, accounted for coking coal. The main source of imported coking coal is Australia.

Coke is an essential raw material for many industries. Hence we need to look at the industry structure in line with the major consuming sectors of the economy.

Integrated steel producers
The Indian coke industry is dominated by the integrated steel plants (ISPs). These units possess captive coking facilities. The production of coke by the ISPs is estimated at around 13.70 million tonnes (FY 2007-08). Coke produced by these units is a blend of imported coal and indigenous varieties; hence, the coke quality differs with each producer and cannot be sold in the open market in large quantities.

Secondary steel sector (Mini Blast Furnaces)
There are currently more than 20 pig iron producing units (mini-blast furnace route). These units need an annual 9.74 million tonnes of coke for their operations. Presently, only a few companies possess captive coke manufacturing facilities while the other units rely largely on imported Chinese coke.

India is the fifth largest producer of steel in the world and is slated to become the second largest by the year 2015-16. With a benchmark of even 200 million tonnes of steel by 2020, India faces an acute shortage of coking coal. Every tonne of steel produced in the blast furnace route requires one tonne of coking coal. For additional 150 million tonnes of steel, at least 120 million tonnes of additional coal would need to be imported (assuming 80% of new capacity using the BF route).

Foundries, chemical units

• Large number of small consumers scattered throughout the country.

• Their individual consumption is not large enough to justify the setting up of a captive coke plant.

• Continued dependence on merchant cookeries/imported coke.

• Cumulative demand by the foundries is estimated at around 3 million tonnes per annum.

Chemical/zinc units

• Few units in this category primarily concentrated in the west.

• Gross annual demand estimated at around 2 million tonnes.

• Demand met by local production.

The demand and production of coke in India for 2008 is:

Source : internal company estimates
Coking Coal Demand Projections (in million tonnes)

In India, the merchant metallurgical coke capacities are largely situated in western India, logistics and proximity to a large consumer market being the primary factors contributing to this skewed concentration.
In the East, there are a large number of small cokeries with capacities ranging between 6,000 TPA to 48,000 TPA. Their cumulative capacity is estimated at around 50 lac TPA. These units are primarily situated near the Dhanbad coal belt. Besides, there are government-owned coke plants on the east coast.