New steel plants may be required to use at least 30% domestic coking coal

India’s steel sector is preparing for a significant policy shift: all new steel plants opening till 2030 may be required to use at least 30% domestic coking coal, up from the current 20%. This blending mandate is aimed at reducing import dependence, cutting foreign exchange outflows, and boosting local coal utilization. 🔑 Key Highlights Policy Goal: Reduce imports of coking coal (57 mt in FY25 worth ₹1 trillion) and enhance self-reliance. Steel Capacity Expansion: National Steel Policy targets crude steel output rising from 168 mt in FY26 to 300 mt by FY31. Domestic Coal Production: Mission Coking Coal aims to raise raw coking coal output from 59.6 mt in FY25 to 140 mt by 2030. Washed Coal Supply: Current washing capacity ~30 mt, expected to reach 58 mt by 2030, improving quality for blending. Technology Support: Stamp-charging technology to help utilize lower-quality domestic coal more effectively in blast ***** Issues: Indian coal has high ash and sulfur content, reducing blast furnace efficiency. Washeries are critical to improve usability. Efficiency Impact: Higher blending may raise production costs due to lower furnace efficiency, requiring domestic coal prices to be adjusted downward. Industry Readiness: Steelmakers like Tata Steel, JSW, Jindal, and SAIL have not yet commented on preparedness for higher blending. Strategic Importance: Reduced import dependence strengthens raw material security and shields the sector from global supply shocks. Outlook The 30% blending mandate will initially apply to new steel capacities, but may extend to existing plants as domestic washed coal availability improves. While short-term efficiency costs are expected, long-term benefits include lower import bills, improved supply security, and strategic resilience. Adoption of advanced coke oven technologies and expanded washeries will be crucial for successful implementation.