This Coke ain’t no cool
Shantanu Rai, Consultant, NITI Aayog
Hold on and take a step back, it's not the Coke that quenches your thirst, I am talking about Metallurgical Coke, which quenches the endothermic thirst of gigantic blast furnaces that produce hot metal, which is further preferentially oxidized and refined in Basic Oxygen Furnaces (BOF) to produce liquid steel, which then goes through several secondary metallurgy operations, and finally cast and rolled into products of desired shape and size.
India produced 106.56 MTPA (Million Tonnes per Annum) of liquid steel in FY 19 out of which 50.08 MTPA was produced through the conventional BF-BOF route. The key benefits of this process are its robustness, mature technology, and high economies of scale & scope. However, in the Indian context, this process suffers a serious drawback that is its critical dependency on Coking Coal, which is heated in the absence of air to produce Metallurgical Coke in Coke Oven batteries. Metallurgical coke plays the following role in Blast Furnace route of Iron Making: provides the necessary heat required for the endothermic process, produces the reducing gas CO/ CO2 for indirect and direct reduction of iron oxides & agglomerates, supports the raw material burden and maintains permeability.
While the Coke rate (Specific Consumption of Metallurgical Coke/ Ton of Hot Metal) of globally best performing Blast Furnaces is ~ 300-350 Kgs/THM, that of the Indian Blast Furnaces is 450-550 Kgs/THM. One of the major reasons behind this is the high Alumina & Silica content in the Indian iron ore. As per Deptt. of Commerce data, India imported around 51.84 Million Tonnes of Coking coal during FY 19 spending around US$ 10.32 Billion, which was up by 11.76% against the corresponding figure of US$ 9.23 billion in FY 18. Coking Coal imports accounted for ~ 2% of overall imports in the country.
The National Steel Policy envisions that India will produce 300 MTPA of Liquid Steel by 2030-31. The policy estimates that 60-65% of the production i.e. ~ 187.5 MTPA shall come thought the BF-BOF route, which will require 161 MTPA of coking coal. Based on heuristics and the current price trends, India’s total import bill for coking coal shall be ~ US$ 32 billion.
Looking at the status quo and future trends, it is clear that this very commodity is and going to be a significant contributor to our total import bill. Also, steel being a strategic commodity for our country heavy dependence on imports leaves us vulnerable to supply chain disruptions. When it rains in Queensland-Australia, the Indian Steel sector starts shivering. But the question is, are we helpless in this regard and can’t do anything to mitigate this huge risk?
Nay, we have several risk mitigation tools at our end that can help us overcome this issue. These inter alia include: 1) Finding a solution to the Jharia issue: Jharia is the only coalfield in India with deposits of Prime Coking coal (Estimated Deposits: 5313.06 Million Tonnes). The region has sufficient reserves to remove our dependence on imports and meet our demand for the foreseeable future of BF-BOF route of steelmaking in the country, which may around 70 years or so max before which scrap-based and other ITMK3 (Iron Making Technology Mark 3) steelmaking technologies completely take over. However, underground fires burning for centuries (it is estimated that we might have lost ~ 40-50 Million tonnes of reserve in these underground fires) and the inability to relocate and rehabilitate the locals has prevented us from mining the reserves.
2) Proper Utilization of LVC ( Low Volatile Coking) Coals: India has deposits of around 33 Billion Tonnes of Coking Coal, of which 18 Billion tonnes belong to the LVC category having 30-50 % ash content. Although these coals have complex washing characteristic, they can be washed to bring down the ash level to ≤18% and blend with prime coking coals for producing metallurgical coke. Several pilot studies done in the country by institutes such as the Central Fuel Research Institute (CFRI) have proved this theory. While the production of coking coal has increased significantly over the years, the proportion suitable for metallurgical purposes has remained stagnant or has come down in the last 2 decades. Rest of the coking coal production, which could have been produced by the domestic steel industry is being sold to power plants. This practice has no rational when the domestic steel sector is facing crunch of this key material and the country has ample reserves of thermal/non-coking coal to meet its power demand. Also, public sector companies such as SAIL should shed their inertia and step up the learning curve. The blend ratio of imported coking coal for SAIL units is in the range of ~ 85-90% on average while that for Tata Steel is ~ 50 %. Adopting best practices would not only improve the bottom line for PSUs but also bring down the import bill of the country.
3) Revisiting the National Steel policy and enhancing the share of electric steelmaking: Given the thrust towards a circular economy, the country’s pledge towards the Paris accord to bring down the GDP emission intensity by 33-35 % by 2030 from 2005 levels, and reducing the import bill attributable to the steel industry, the National Steel policy needs to be revisited and the share of electric steelmaking should be increased which is estimated at 35-40% presently. Also, the increased electric steel making share should come from EAF (Electric Arc Furnace ) steelmaking and not from IF ( Induction Furnace) steelmaking, which are garbage in and garbage out furnaces and produce steels which are unsafe ( it is estimated that hardly 1 % of the operating IFs in the country have BIS certified testing facilities) and have relatively higher overall carbon footprint. At the same time, clean Iron Making technologies such as natural gas-based DRI should be promoted in the country and the produces should be given priority in natural gas allocation.
Thus, we have several mitigation tools to smother the unwanted heat caused by this uncool coal and let it not roast us.
 Shantanu Rai is working as a Consultant - Minerals in NITI Aayog. He has close to a decade’s experience in business and technology advisory for the Iron & Steel Industry across Govt. & Pvt. Sector and International Think Tanks. He attended the flagship MBA program at the prestigious Indian School of Business (ISB) - Mohali campus and holds a B.Tech in Materials Engineering from the National Institute of Technology (NIT), Rourkela (Declared an institute of national importance by an act of the Parliament of India in 2007.)