Govt aims to reduce overall coal import to 10% by FY26, say sources

New Delhi: With domestic coal production clocking good numbers, the government is aiming to reduce overall coal imports to 10 percent by FY26, two ministry sources in the know of the matter told PSU Watch. “The government’s plan is to reduce the overall import of coal to 16 percent by FY25 and further down to 10 percent by FY26, which will mostly be coal that can be substituted via domestic coal,” said one of the two sources quoted above. A day ago, the Ministry of Coal reported that there has been a decline of 36.69 percent in coal imported for blending by the power sector to 19.36 MT during April-January period from 30.58 MT in the corresponding period of the previous year.

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The sources said that at the end of the current financial year, the overall coal import is expected to settle at 19 percent of the total consumption.

India to import only those varieties of coal by FY26 that it cannot substitute

While Coal Minister Pralhad Joshi has said on numerous occasions that the government is aiming to reduce the import of non-coking coal, used by the power sector, to zero by FY26, the government’s plans for reducing the coal import to 10 percent by FY26 means that only those varieties of coal will be imported that cannot be substituted through domestically available grades, which is mainly coking coal.

India has the world’s fifth-largest reserves of thermal grade coal which has high ash content. This variety of coal is suitable for use in thermal power generation, but cannot be used in industries such as cement and steel. The presence of coking coal in India is limited, mainly restricted to the eastern parts of India. However, the government is planning to put in place coal washeries which is expected to marginally improve the availability of low-ash coal for cement and steel industries. The government has plans to set up 12 new coking coal washeries through Coal India Limited (CIL), all of which are expected to be functional by FY26.

Coal washing is a process of enrichment of combustibles in coal by removal of non-combustible impurities, utilising industrial separators mainly based on the difference in specific gravity of coal and associated impurities like shale, sand and stones etc.

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