demand and supply gap of coal for indian steel & … · 2015. 6. 6. · mrs. priya kumari**...

JOURNAL OF INTERNATIONAL ACADEMIC RESEARCH FOR MULTIDISCIPLINARY Impact Factor 1.625, ISSN: 2320-5083, Volume 3, Issue 5, June 2015

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DEMAND AND SUPPLY GAP OF COAL FOR INDIAN STEEL & POWER PLANTS: OUR STRATEGY

Dr. ASHOK K. SINGH* Mrs. PRIYA KUMARI**

*Principal Scientist; Head, Coal Characterization and Coal Petrology Department, RQA CSIR-Central Institute

of Mining and Fuel Research, Ministry of Science & Technology, Govt. of India, (Digwadih Campus), Dhanbad, Jharkhand, India

**CSIR-Central institute of Mining and Fuel Research, P.O. FRI, DHANBAD

ABSTRACT

In India about 55% of electricity is generated from coal. Energy consumption in India

has risen 700 times in last four decades. The commercial energy consumption at present in

India is approx. 350 kgoe. This is far less than developed countries. In the twelfth five year

plan (2012-2017) the demand of coal has increased by around 80% annually. In this five year

plan coal demand is expected to be around 900-1000 Mt. The gap in demands and supply is

to be met through imports. The coal import during the year 2016-17 is expected to be around

200 Mt. This doesn’t appear feasible to meet out through domestic systems. In this paper

attempt has been made to discuss the modalities to meet out the gap in demand and supply of

coal for two major Indian industries i.e. Steel and Power.

KEYWORDS: Demand Supply Gap, Coking Coal, Non Coking Coal, Steel Industry, Power

Industry in India.

INTRODUCTION

Globally, coal resources have been estimated at over 861Bt (billion tonne) which

includes for India’s 294 billion tonne (Bt) of coal resources (GSI, 2012), other countries with

major chunk of resources are USA, China, Australia, Indonesia, South Africa and

Mozambique (ICC, 2012). Coal meets around 30.3% of the global primary energy needs and

generates 42% of the world’s electricity. In 2011, coal was one of the fastest growing forms

of energy after renewable sources and its share in the global primary energy consumption

increased to 30.3%, all time high since 1969. Coal production in Asia Pacific region has

grown tremendously and accounts for over 67% of the total production globally (2011) as

compared to about 27% in 1981 (in terms of energy equivalent) (ICC, 2012).


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Figure 1: Global coal production (Mtoe) (ICC, 2012).

India has the fifth largest coal reserves in the world. Of the total reserves, nearly 88%

are non coking reserves. While tertiary coal reserves accounts for a meager 0.5% and the

balance is coking coal. The Indian coal is characterized by its high ash (45%) and low

sulphur content. The power sector is the largest consumer of coal followed by the Iron and

Steel and cement segments. The country’s coal production has increased from 431 Mt in

2006-2007 to 554 Mt in 2011-2012 (an increase of 28.5%).On the other hand the demand for

coal has grown at a CAGR of more than 7% in the last decade and has reached around 600

Mt. As per the India Energy book, 2012 the country’s total demand supply gap (including

coking coal) is about 98 Mt, out of this India imports about 85 Mt of coal (ICC, 2012).

International status for coking & thermal Coal

Coal provides 30.3% of global primary energy needs and generates 42% of the world’s

electricity. Coal was the fastest growing form of energy outsides renewable resources (WSA, 2012).

Figure 2: Coal production & consumption (WSA, 2012).

Asia Pacific is expected to account for 70.8% of the global coal production and 71.3% of the

global consumption in 2015 with China and India being two largest consumers. The demand


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and supply gap is expected to widen in 2030 as Asia pacific is expected to produce 73.8% of

the global coal production but will consume 77.7% of the total consumption (ICC, 2012).

Table 1: Top ten coking coal producers (2011e) (WSA, 2012) Among the top ten coking coal producers in the world, PR China remains in the first place

followed by Australia, USA and Russia. India stands fifth with annual coking coal production

of 35 Mt.

National status for coking and thermal Coal

The resources in India are available in older Gondwana Formations of Peninsular India and

younger Tertiary formation of north-eastern region. The formation and category wise

resources of India (excluding Tertiary Lignite) as on 1.4.2012 are given below in Table 2 (In

million tonnes) (GSI, 2012).

Table 2: Category-wise geological distribution of Indian coals

Table 3: The type wise and category-wise coal resources of India as on 1.4.2012 are given below (GSI, 2012).

Cou

ntr

y

PR

Ch

ina

Au

stra

lia

US

A

Ru

ssia

Ind

ia

Can

ada

Mon

goli

a

Uk

rain

e

Kaz

akh

stan

Pol

and

Coal Production

504 Mt

146 Mt

82 Mt

78 Mt

35 Mt

29 Mt

20 Mt

20 Mt

13 Mt

11 Mt

In Million tonne

PROVED INDICATED INFERRED TOTAL

FORMATION

GONDWANA COALS 117551.01 142069.51 321383.99 292004.51

TERTIARY COALS 593.81 99.34 799.49 1492.64

TOTAL 118144.82 1422168.85 33183.49 293497.15

Type of coal PROVED INDICATED INFERRED TOTAL

(A)COKING COAL

Prime Coking 4614.65 698.71 0 5313.06

Medium Coking 12836.84 11951.47 1880.23 26668.54

Semi-coking 482.16 1003.29 221.68 1707.13

Sub-Total of coking 17933.35 13653.47 2101.91 33688.73

(B)NON COKING 99617.65 128416.04 30282.09 258315.78

(C)TERTIARY COALS 593.81 99.34 799.49 1492.64

GRAND TOTAL 118144.81 142168.85 33183.49 293497.17


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State-wise distribution of coal reserves

As a result of exploration carried out up to the depth of 1200 meter, cumulative total of

293.497 million tones of geological resources of coal have so far been estimated in country as

on 1.4.2012. The detail of state wise geological resources of coal is given as under:-

Table 4: GONDWANA COAL (GSI, 2012)

STATE GEOLOGICAL RESOURCES OF COAL(Mt)

PROVED INDICATED INFERRED TOTAL

Andra Pradesh 9566.61 9553.91 3034.34 22154.9

Assam 0 2.79 0 2.79

Bihar 0 0 160 160

Chhattisgarh 13987.9 33448.3 3410.05 50846.2

Jharkhand 40163.2 33609.3 6583.69 80356.2

Madhya Pradesh 9308.7 12290.7 2776.91 24376.3

Maharashtra 5667.48 3104.4 2110.21 10882.1

Orissa 25547.7 36466 9433.78 71447.4

Sikkim 0 58.25 42.98 101.23

Uttar Pradesh 884.04 177.76 0 1061.8

West Bengal 12425.4 13358.2 4832.04 30615.7

TOTAL 117551 142070 32384 292005

Table 5: TERTIARY COAL (GSI, 2012)

STATE GEOLOGICAL RESOURCES OF COAL(Mt)

PROVED INDICATED INFERRED(Exploration)INFERRED (Mapping) TOTAL

Arunachal Pradesh 31.23 40.11 12.89 6 90.23

Assam 464.78 42.72 0.5 2.52 510.52

Meghalaya 89.04 16.51 27.58 443.35 576.48

Nagaland 8.76 0 8.6 298.05 315.41

Total 593.81 99.34 49.57 749.92 1492.64


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(Figure 2A: Distribution of Coking Coal State Wise & Depth Wise (GSI, 2012) (Mt).

Approximately 13 % (around 717 Mt) of total hard coal production is currently used

by the steel industry and over 60% of total global steel production is dependent on coal. Our

country has very limited resources of coking coal and it accounts for only 15% of the

country’s overall proven reserves. The Jharkhand holds the majority of the coking coal

reserves with total of 37598.01 Mt in which 18112.13 Mt is in the proven category. Madhya

Pradesh comes second in the tally with total coking coal reserves of 2187.43 Mt out of this

354.49 comes in the proven category. Chhattisgarh has the least coking coal reserves of

170.02 Mt (Fig: 2A).

Figure 3: Distribution of Non-Coking Coal State Wise & Depth Wise (GSI, 2012)(Mt).

As per demand projection, power utilities would continue to be the most important

consuming segment. The share of power is 682.08 Mt in the total assessed coal demand.

(Total non-coking coal demand of 913.30 Mt) work out to 74.7% demand vis-à-vis

availability for TY of XIIth plan. The majority of non-coking coal comes from the Odisha

having the total reserve of 142894.82 Mt; it has 51095.32 Mt proven reserves. Then comes

Chhattisgarh with total non coking reserve of 78845.82 Mt and having the proven reserve of

20612.60 Mt. Madhya Pradesh has the least non coking coal reserve of 42870.07 Mt, with a


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proven reserve of 16948.38.(GOI, 2012).According to geological survey of India’s reports till

1.04.2012, our total non coking reserve is about 418094.80 Mt, with proven reserve of

168881.32 (GSI, 2012).The overall long- term demand of coal is closely linked to the

performance of the end-use sectors in India. The end use sectors of coal mainly include

electricity, iron and steel and cement. Other industries using coal have marginal impact on the

long-term demand of coal.

The charts show the projected sector wise coal consumption in India by the end of the 12th FYP and 15th FYP (fig 4 & 5).

Figure 4 Figure 5 Shortfall of coking coal for steel industries

Coal is an essential input in the production of steel. In 2011, the world crude steel production

reached 1,518 Mt, reflecting a growth of 6.2% over 2010. Global steel production depends on

coal. Around 68% of total steel production relies directly on inputs of coal. 761 Mt of coking

coal and pulverized coal injection (PCI) coals are used in global steel production, which is

around 12% of total hard coal consumption worldwide(ICC, 2012).

Table 6: Crude Steel production (WSA, 2012) YEAR 2004 2005 2006 2007 2008 2009 2010 2011 PRODUCTION 1061 1147 1249 1347 1341 1236 1429 1518

India has very limited reserves of coking coal, which is a key raw material for the

production of steel. About 770 kg of coal are required to produce 1 tonne of steel by

conventional route. Coking coal accounts for only 15% of the country’s overall proven coal

reserves. The Jharia coalfield, located in the state of Jharkhand, holds the majority of the

coking coal reserves. The Indian steel industries are facing acute shortage of coal for the last

several years (ICC, 2012). As per the report of working group of coal and lignite for the 12th


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FYP, the steel production by 2016-17 is projected to be 105 Mt. The corresponding

requirement of coking coal for this quantity of steel is estimated to be 67.2 Mt in 2016-

17(GOI, 2012).

Figure 6: Coal demand in India (ICC, 2012).

The per capita finished steel consumption in 2011 is estimated currently at 215 kg for

world and 460 kg for China, while that for India it is estimated currently at 55 kg

(provisional). This clearly indicates scope for increasing the per capita steel consumption, a

factor which correlates to the coking coal availability and production within the country

(WSA, 2012).

Per Capita Use of Steel (2011) Table 7: The per capita use of steel varies significantly around the world (kg per capita) (WSA, 2012).

COUNTRY SOUTH KOREA

CHINESE TAPEI

JAPAN GERMANY PR CHINA

RUSSIA USA BRAZIL INDIA WORLD

PER CAPITA USE

1157 KG 784 KG 506 KG

480 KG 460 KG 292 KG 284 KG

123 KG 57 KG 215 KG

Further, the ministry of steel (Govt. of India) projected to build steel production capacities of

200 Mt by 2020 to meet the rising demand. Out of this, almost 70% of the steel might be

based on the basic oxygen furnaces (BOF) technology. Different scenarios for coking coal

requirement are also proposed under different studies, and their projections are as follows:-

Figure 7: Coking coal demand for steel.


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The current shortage of coal stands at 84 Mt and the same is expected to rise to 300 MTPA.

Some of this shortfall will be met by supplies from domestic blocks and rest through imports.

Also, the choice between the supplies from domestic and imported coal is mainly driven by

timely availability of coal from domestic sources. It became important for India to secure

coal through imports from international market to meet their significantly rising coal demand.

However, import is mainly dependent on availability of coal in global market, increasing

competitive scenario and affordability (ICC, 2012).

Figure 8: (ICC, 2012)

Shortfall of Non-Coking Coal for Power Sector

Coal is the major fuel used for generating electricity worldwide-countries heavily depend on

coal for electricity. Of the total electricity consumed in the most of the country,

approximately 80% is produced from coal (WSA, 2012).

Figure 9: Sources of electricity generation


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India is fifth largest energy consumer, accounting for 4.1% of the global energy

consumption. The current per capita consumption of energy in India is 0.5 toe against the

global average of 1.9 toe, indicating a high potential for growth in this sector (ICC, 2012).

For the XIIth five plan period, CEA has indicated a coal based capacity addition plan of

79010 MW (14560 MW in Central sector, 12080 MW in the state sector and 52370 MW in

private sector). This apart, CEA has also indicated 38905 MW coal based capacity is under

various stages of execution. After considering the capacity addition program of CEA and

going by the trend that around 70% of the projected energy requirement to be coal based.

Further, considering that there will be substantial increase in use of washed coal and imported

coal at power plants, the specific coal consumption has been considered to be 0.70 kg/Kwh.

The coal requirement for power sector, thus work out to 682 Mt in 2016-17. Approximately,

57% or 118.7 GW of India’s total installed generating capacity of 207.9 GW is coal fired,

while over two thirds of electricity generation is from coal based plants. At global level, coal

accounts for 30% of the world’s primary energy consumption (GOI, 2012).

The average plant load factor for coal plants (which is function of coal availability, repair and

maintenance and connected demand) was 61.30%. Part of this can be attributed to the fact

that only 89% of the total requirement of coal (30.6 Mt of coal against the demand of 34.4

Mt) was available.

Considering the above facts, it is clear that the shortage of coal has lead to installed capacity

remaining unutilized and shortfall in the power generation. On the other hand, electricity

being a basic and necessary public service, any nation wanting to grow in economic and

social terms must be able to provide sufficient and efficient power generation. Neither

manufacturing, finance nor commerce can function without electricity.

Table 8: Top Ten Steam Coal Producers (2011e) (WSA, 2012) COUNTRY PR

China USA India Indonesia South

Africa Australia Russia Kazakhstan Colombia Poland

PRODUCTION IN MILLION TON

2831 Mt

849 Mt

509 Mt

373 Mt

250 Mt 199 Mt

178 Mt

98 Mt

80 Mt

65 Mt

As shown in the above table, PR China stood first worldwide with 2831 Mt of steam coal

production followed by the USA and India which comes third in this tally with annual steam

coal production of 509 Mt.

Demand vis-à-vis Availability

In overall term, the gap between the projected demand of 980.50 Mt and the projected

domestic availability of 980.50 Mt and the projected domestic availability of 715 Mt works


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out to 265.50 Mt in 2016-17. This comprises of 35.50 Mt of coking coal and 230.0 Mt of

thermal coal. If the production is enhanced to the level visualized in the optimistic scenario,

the demand-availability gap would reduce to 185.50 Mt (coking: 35.50 Mt & Non coking 150

Mt).This requirement would be need to be met from imports (GOI, 2012).

Table 9: DEMAND PRODUCTION GAP(-)/SURPLUS(+) COOKING 67.2 31.7 (-)35.50 NON-COOKING 913.3 683.3 (-)230.00 TOTAL 980.5 715 (-)265.50

Coal contributes to about more than 1.5% of the GDP of the country. The unavailability of

coal will have significant impact on the power generation in the country which in turn would

impact new proposed projects in the manufacturing and cement sector in the country and

retard overall economic growth.

Government strategies & alternatives to fulfill the demand supply gap in coking and

thermal coal (Choudhary, 2012)

Some of the alternatives routes and strategies suitable for Indian scenario have been

discussed as under-

1. Preheating

By the Preheating process, the inferior non-coking coal before charging to oven is

heated at 150-250 0 c, where the bulk density as well as heat conducted to the coal in

the oxygen oven is increased improving the quality of coke after carbonization. In

some plants this process is being tried in India.

2. Briquette blending

By this process the coke strength and reactivity has similar properties to conventional

coke in spite of blending of non coking coal. In this process coal is briquetted with the

help of binder pitch; the strength of coke obtained from the coal blend is increased by

1.5%. This process of improving coke quality is widely used in Japan and has scope in

India also.

3. Formed coke making

It is another process for improving coke quality by using non coking coal. The coal is

carbonized and the char produced is briquetted at 1-2 tonnes/square inch pressure with

tar formed at the same time and the briquette devolatilized. Coke produced in this


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process is suitable for foundries. The process has been tried by number of countries

like USA, Poland, UK and India and bears good potential for Indian Industries.

4. Selective crushing

By selective crushing, the harder constituents are subjected to more intense grinding to

reduce over size. The advantage of selective crushing is that improved quality of coke

is produced from coal, which reduces the coke rate by 2.4% and increases blast

furnace output by 2.5%. The technique helps in utilization of higher percentage of

inferior or poor coking in coal blend. For Indian coal this process may be tried.

5. Technology of group wise crushing of coal.

The technology of group-wise crushing of coals, which aims at decreasing the

heterogeneity in the properties of different size fractions of coal blend and improving

the properties of coarser size fractions by crushing them to groups to the required

crushing levels as dictated by the technological requirement. It is being applied in

many countries.

6. Stamp charging

In this process coal is crushed and compressed by stamping machine, whereby the

coke formed is charged to coke oven maintaining certain gap from the wall. The coal

density is improved and the carbonized product gets higher micum M40 than the

original. CIMFR, Dhanbad has done some research work and it has been found that it

is very suitable for Indian scenario. Tata Steel is already using these techniques in

India.

7. Beneficiation of coal

For Indian condition, we need 17% ash for coking coal and 34% for thermal coal. Ash

percentage of different size fractions is lowered through washing using heavy media,

jigs, hydro cyclone and forth floatation where coal is washed removing ash and

mineral impurities as rejects. The concentrate having good quality coal is used for

blend in coke oven. Middlings of higher ash content is sent to thermal power plant and

tailing and rejects are disposed off. Sometimes middlings or rejects having even up to

65% ash is used in PFBC boilers for power generation.


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8. Selective agglomeration of coal

One of the most useful processes developed for reclamation of coking coal portion

from high ash coal or their middling or washed slurry is selective agglomeration using

fuel oil or kerosene. It is also being used by different industries in India.

9. Addition of pitch in solvent extract of coal

In CIMFR (erstwhile CFRI), research has shown that it is possible to produce coking

coals from non-coking coal by addition of solvent extract of coal obtained using

anthracene oil under hydrogen pressure of about 60 kg/cm� in batch autoclave. Pitch

addition also can be done to the blend for improving coking properties.

10. Different alternative routes in steel industries

Direct reduction for sponge iron production (DRI route) is tried in our country, where

inferior non coking coal, limestone, dolomite and iron oxide used in the rotator kiln

giving oxidation-reduction reaction, where 90% metallization of sponge iron is

produced and fed in electric arc furnace for special steel.

11. Deshaling of ROM coal by heavy medium Drewbouy vessel

The Drewbouy vessel was originally specifically designed for deshaling ROM coal in

H.M.S. It is the only available equipment in the world, which can handle

500x500x1200 mm size and is the only option to treat true ROM coal. It holds good

prospect for Indian coals.

12. By jigs

Babock plant is good illustration of the possibility of utilization of jigs in preparation

plants dedicated to deshaling operation in front of power plant. Now a day, the

technique is gaining popularity in Indian scenario.

13. Coal and industrial furnace

Indian industries use six million tones of coals in furnace alone to produce heat. If

we are able to replace the coal from other energy source the scope for saving on coal

consumption in furnace becomes as high as 25%.

Apart from above alternatives, Government of India is trying its best to acquire more

and more coal from overseas. Recently, CIL, Ministry of Coal through its newly

formed subsidiary, Coal India Africana Limitada (CIAL) acquired 1.0 Bt coal lease in

the Tete province of Mozambique. It contains 80% thermal and 20% coking coal. In

other efforts, Government of India is planning to acquire few more coal leases in

Australia, Indonesia and South Africa etc.


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Conclusion

In view of deterioration of coal quality and preservation of coking coal for

metallurgical process, the processes of up gradation of coal quality by treatment mentioned

earlier like preheating, briquette blending, stamp charging, beneficiation, may help in Indian

scenario. Alternative roots of iron making can largely be used by utilizing large deposit of

non-coking coal. The phosphorus content of Indian non-coking coal is quite low. Most of the

coals identified for the Inred and KR processes have sulphur below 0 .05%. Inred and KR hot

metals may be a good substitute for the phosphorus blast furnace pig iron. Both these

processes can produce low phosphorus metals through use of non-coking coal. For power

sector it would be most sensible to utilize every part of combustible matter in coal i.e. washed

low ash coal going to the thermal plant, and the reject produced is burnt in the fluidized bed

boiler for further generation of power. The investigation can be directed for removal of high

ash stones/carbonaceous matter at high specific gravity by this beneficiation process. In

future, when boiler designs are required for higher capacity thermal power unit, beneficiated

coal with limited ash content at 25-30% can be transported over long distance by railway

system. While the higher ash beneficiated fraction can be consumed by pithead power plant.

Acquisition of new coal leases abroad will also help meeting out the demand supply gaps in

coal for Steel & Power sectors.

Acknowledgement

The authors are thankful to Scientist in Charge and the Director, CIMFR for kindly

permitting to submit this paper in this seminar. Special thanks to Mr. Ritesh Mohan, Ms

Dipti, Mrs. Jyotsna Kumari & Mr. R. Singh for giving valuable suggestions.

References

1. Report of the working Group on Coal & lignite, Government of India, Ministry of coal. 2. Shastri Bhawan New Delhi, 2012. 3. Government of India, Ministry of Steel, 2012. 4. Geological Survey of India Reports, Ministry of Mines, Govt. of India, Kolkata, 2012. 5. The Indian coal sector: challenges and future outlook: Indian Chamber of Commerce, 2012. 6. World Steel Association, 2012. 7. Application of inferior grade of coal for metallurgical as well as for power generation in

different industries, Ranjit Choudhary, 2012.

demand and supply gap of coal for indian steel & … · 2015. 6. 6. · mrs. priya kumari**...

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