Industry Insight May 2007

The Metallurgical Coke Market in India

by Atia Imam
 Contents Industry Insight

Introduction 3 Tables
Definition: metallurgical coke (metcoke) 3 1 Usage of metcoke in India 4
Manufacture of metcoke 3 2 Supply and demand of metcoke in India,
Metcoke industry in India 4 2006 5
3 Coal resources in India, 2006 7
Published by IntertechPira
Metcoke in India 5 4 Grade, specifications and prices of coking coal 7
Current situation 5 5 Standard properties of blast furnace metcoke 7
Future outlook 7 6 Metcoke market in India, 2007–12 8 UK:
Political impacts 8 7 Top metcoke producers in India 15 Cleeve Road,
Ministry of Coal 8 8 Major metcoke producers’ products and Leatherhead,
Nationalisation 9 exports 15 Surrey
Main regulatory bodies 10 KT22 7RU
Economic impacts 11 Figures T +44 (0)1372 802080
Technology impacts 11 1 Import vs domestic production of metcoke 5 F +44 (0)1372 802079
Stamp charging technology 11 2 Indian coke resource classification 6 E publications@pira-international.com
PBCC and tall coke ovens battery technology 11 3 Projections of demand for metcoke in India, W www.intertechpira.com
Coal dust injection and oxygen enrichment 2006–12 (CAGR 11.85%) 8
technology 12 4 Projections of supply of metcoke in India,
US:
Corex Technology 12 2006–12 (CAGR 13.12%) 9
19 Northbrook Drive
5 Projections of import of metcoke in India,
Market analysis 13 2006–12 (CAGR 7.48%) 9
Portland
Geological reserves 13 6 The manufacture of low ash metcoke – Maine 04105
Production 13 a destructive distillation process 12 T +1 207 781 9800
Supply and demand 13 F +1 207 781 2150
Drivers of growth 13 E publications@intertechusa.com
W www.intertechpira.com
Company profiles 15
© IntertechPira 2007


 Introduction
This report is a comprehensive analysis of
the Indian metallurgical coke (metcoke)
market. It traces the various methods used
to produce metcoke in India and how
metcoke is used across various sectors. The
analysis outlines the shape and size of the
market. The report mainly focuses on a
market overview, describing both the current
scenario and future outlook. It reviews
present resources and their ability to meet
India’s growing demand for metcoke. The
growth drivers for metcoke are identified,
the import dependence of the country is
analysed and future projections are given.
The main governing body, along with its
functions and impact on the metcoke
market in India, is also studied. The study
also focuses on:
• Political, economic and technological
impacts on metcoke and the way they
could alter future markets;
• The implications of quality on the pricing
of metcoke and future stability of the
price of imported metcoke;
• How lenient foreign direct investment
(FDI) regulations have brought about a
huge change in the domestic metcoke
industry, with foreign collaborations and
ties;
 Industry
• The impact of the growing steel industry
on metcoke demand, supply and import.
Key players in the metcoke production
market are identified and their market
dynamics studied briefly, along with key
figures and information for each of the
market players.
Definition: metallurgical coke
(metcoke)
The term metallurgical coke, or metcoke,
is derived from the word metallurgy,
meaning the science of extracting metal,
and coke, from the word carbon. Coke is a
type of carbon treated to withstand very
intense heat in order to act as a reducing
agent in steel blast furnaces. The physical
characteristic of metcoke can be described
as macroporous carbon that is dark, hard
and with minimum volatile content.
Metcoke is obtained by heating bituminous
coal (a hard coal that contains a tar-like
substance called bitumen) containing
volatile matter at a very high temperature
(1,000–1,100°C) in the absence of oxygen,
in a series of ovens. Longer duration of
coking is considered to be elemental in
producing the best quality metcoke, usually
14–16 hours depending on the quality of
coal. Around 1.3 tonnes of coal are required
to produce 1 tonne of coke.
Metcoke consists mainly of carbon, with
some mineral and residual volatile material.
It is used as a primary fuel in industries
where a uniform and high temperature is
required, for instance in kilns or furnaces in
the ferroalloy industry (producing various
alloys of iron and one or more other
elements, such as silicon or manganese). A
blast furnace needs 70% prime and 30%
medium coking coal in order to produce
high grade metcoke.
Manufacture of metcoke
There are two main ways to manufacture
metcoke:
• Non-recovery process – In this process
volatile compounds are fully combusted
inside the ovens and the remaining
solid carbon is coke. It is then cooled
by spraying with water or circulating
nitrogen gas.
• By-product recovery process – In this
method volatile matter is collected, coke
oven gas is cooled and by-products are
collected. For example, one by-product,
coke breeze, is either reused or sold in the
market separately.
Insight
The quality of the metcoke can be
determined by its physical characteristics,
such as:
• Less ash content
• Less moisture content
• Adequate mineral content
• Hardness, porosity and reactivity.
Due to a shortage of coking coal in India,
coke is now also produced by blending
coking coal (the primary raw material for
making metcoke), non-coking coal and
some additives.
Metcoke industry in India
This section briefly summarises the metcoke
industry in India:
• India is the second largest importer of
metcoke, importing around 65 million
tonnes a year.
• Integration is happening at every level of
the industry. For example, international
mining companies and trading companies
like TISCO, CVRD and the Nobel group
are investing in metcoke assets like
Saurashtra Fuels and Gujarat NRE.
• Reinvented technology is resulting in
declining demand and usage of metcoke
 Industry
Table 1 Usage of metcoke in India
Industry Usage
Steel foundry Coke is used to provide additional carbon content to the molten metal
depending upon the specification of the casting. Steel plants that
produce steel from recycled steel scrap and sponge irons also require
coke.
Ferroalloys Coke is used as a reducing agent in the production process.
Cement plants The cement industry is highly thermal energy intrinsic. It mainly relies
on metcoke, lignite and petcoke* for its kilns.
Pig iron plants Coke is purchased from the open market by small pig iron producers in
India with mini blast furnaces.
Chemical plant Some soda ash plants and calcium carbide producers require coke in
their process.
Zinc and lead smelters Coke is a prime ingredient in the process of lead and zinc smelting.
Non-ferrous metal castings Foundries that make castings of copper and brass use coke to melt
the metal.
Iron foundry cupolas Across India iron foundries use coke in a small-scale cupola to melt iron
for casting it into various shapes as per application.
Note *petcoke or petroleum coke is a by-product of the oil refining coking process
Source: IntertechPira
by using other contemporary fuels such – In India metcoke is primarily used in
as gas. pig iron, foundries, ferroalloys, cement,
chemicals and integrated steel plants. It
• The recent budget eliminates any customs is also used for thermal power generation
duty on metcoke imports. This would in various industries but in very small
result in: quantities.
– Easy availability
– Reserving domestic resources for future
exploitation
– Stabilising the price of metcoke in the
domestic market.
Insight
 Metcoke in India

Current situation Table 2 Supply and demand of metcoke in India, 2006

The growth in demand for metallurgical
Consumption Production Import
coke (metcoke) in India has been fuelled
42.70 million tonnes 20.53 million tonnes 24.19 million tonnes*
by the upswing the country’s steel industry,
Note: *2.02 million tonnes difference due to dumping
brought about after the acquisition of Corus
by Indian steel giant Tata Steel. This was
Source: coal.nic.in/Energy CMIE Report
a positive move for the metcoke industry,
which has suffered in recent years due to
China’s export of low-cost metcoke.
Figure 1 Imports vs domestic production of metcoke

This also led to several changes to $PBM
*OEJB

regulations governing the market. In the -UE
$*-


budget for 2007–08 metcoke imports
have been exempted from customs duty,
irrespective of their ash content. This is
move is intended to help the power and
steel industries.

Metcoke manufacture is dominated by

integrated steel plants (ISPs), such as Tata
Steel and SAIL (Steel Authority of India
Limited). These ISPs mostly produce their *NQPSUT 0UIFST 5BUB
4UFFM
own metcoke due to the high demand   

for metcoke in the production of steel.

The secondary steel sector, foundries and
metcoke plants follow. Tata Steel and
Indian Iron and Steel Company (IISCO)
have captive mines and washeries that
partially meet their demands. However,
SAIL, Rashtriya Ispat Nigam Ltd (RINL),
and Neelachal Ispat Nigam Ltd (NINL)
mainly rely on nationalised bodies such as
Source: coal.nic.in
Bharat Coking Coal Limited (BCCL), Western
Coalfields Limited (WCL) and Central
Coalfields Limited (CCL) for their metcoke
supplies. As this supply is inadequate to
fulfil their needs they also use imported
metcoke.
The Indian metcoke industry is plagued by
the destruction of its best quality coking
coal, which is under threat from fires in
East India caused by poor mining practices.
These practices cause environmental
damage. The clearance of around 3 million

 Industry Insight
inhabitants from the area would open up a Figure 2 Indian coke resource classification
huge resource for opencast mining by BCCL.
Till now BCCL only practised underground $PLJOH /PODPLJOH
TVQFSJPS


mining and slaughter mining, which have  °
IJHI
WPMBUJMF
CJUVNJOPVT
caused regular underground mine fires. 
Apart from that the abandoning of open
cast mines would leave it susceptible to
spontaneous combustion once exposed to
the atmosphere. This had led to prime grade
coking coal burning to ashes (some 37
million tonnes have already been lost in this
way) and irreversible atmospheric damage,
costing millions of lives so far, due to fire
/PODPLJOH
JOGFSJPS

and airborne pollutants caused by reckless °
IJHI
WPMBUJMF
TVC
CJUVNJOPVT


mining.

The richness of the resource can be gauged
from the fact that the train track passing
through the belt had to be removed to
curb further accidents. Thereafter effective
mining practices produced 1 million tonnes
of good quality coal. Jharia’s reserves
are estimated at 4.6 billion tonnes of
high-quality coal. It is said that Jharia’s
revitalisation will turn around the fate of
BCCL, as not only will it emerge from debts
(somewhere in the region of 10 billion) but
would make considerable profit.
Of 12 billion tonnes of metcoke reserves in
India, 3.36 billion tonnes is prime coking
and 8.64 billion tonnes is semi-coking
coke. Some 80% of annual production is
consumed by thermal power generation,
i.e. 322 million tonnes. As metcoke
resources are limited, direct imports
supplement supply. Of 42.7 million tonnes
of consumption 40.7 million tonnes is
Source: IntertechPira
attributed to the steel sector and the
remaining 2 million tonnes to coke ovens.
Projections for the supply and demand
of metcoke in 2006 are shown in Table 2
(page 5).
The high level of imports is due to the
following challenges faced by India:
• Domestically produced metcoke has
a high ash content, up to 18%; only
metcoke with a maximum ash content of
9% is considered for use in metallurgical
processes.
• Poor washability.
• Low domestic availability.
• Bad conservation and depletion of
available resources.
To fight these challenges the industry needs
to find solutions. The following measures
may improve the situation:
• By conserving available resources.
• By setting up new washeries.
• By reducing steels dependence on
metcoke for its production.
• Alternatives should be created to reduce
the present dependence on metcoke for
power generation, which accounts for
around 40% of all metcoke.

 Industry Insight
• By exploring and developing new avenues
for enhanced production capacity.
• By making mining more efficient.
• The iron and steel industry can reduce
alumina levels in iron ore to improve
sinter and blast furnace productivity,
reducing the requirement for coke.
The size, strength (i.e. abrasion resistance)
and chemistry of coke are of utmost
importance in gauging its quality. The
carbon textures and microstructure are
factors that influence its behaviour. Its
reactivity, stability and strength after
reactivity determine its usage in blast
furnaces.
The standard properties of blast furnace
metcoke and foundry coke are shown in
Table 5.
Future outlook
Over the next five years the metcoke market
will experience high growth, at a CAGR of
around 8%. Demand is expected to increase
by 12% to 56 million tonnes.
India’s coking coal reserves are estimated
at 4.5 billion tonnes. Due to the depleting
resources of coal in the country and the
poor quality of metcoke production, 85%
of coke is projected to be imported by 2019
– 20 out of every 70 million tonnes of
metcoke are used by the steel industry.
 Industry
Table 3 Coal resources in India, 2006 (billion tonnes)
Proved Indicated Inferred Total
95.87 119.77 36.66 253.3
Source: IntertechPira
Table 4 Grade, specifications and prices of coking coal
Grade Specifications Price run of mine (Rs/tonne)
Steel grade I Ash up to 15% 2,960
Steel grade II Ash 15%–18% 2,480
Washery grade I Ash 18%–21% 2,160–1,620
Washery grade II Ash 21%–24% 1,560–1,340
Washery grade III Ash 24%–28% 1,170–990
Washery grade IV Ash 28%–35% 1,080–910
Semi-coking grade I Up to 19% ash +moisture 1,700–1,440
Semi-coking grade II Up to 24% ash +moisture 1,420–1,200
Note: the cost of producing coke has been constructed using the cost from Indian manufacturers using
the recovery process with appropriate modifications
Source: IntertechPira
Table 5 Standard properties of blast furnace metcoke
Fixed Ash P S Volatile Moisture By-products
carbon (%) (%) (%) (%) matter (%)
(%)
89 9.50 0.020 0.30 1.50 5.0 Crude coal, tar, light
88 10.50 0.025 0.30 1.50 5.0 oils, ammonia etc.
86 12.00 0.03 0.50 1.50 5.0
84 14.00 0.06 0.80 1.80 5.0
Note: quality of metcoke can be interpreted in descending order
Source: IntertechPira
Insight
In its bid to make the coal sector market-
Figure 3 Projections of demand for metcoke in India, 2006–12 (CAGR 11.85%)
driven, the government has decided to
allocate captive coking coal blocks to 
each steel plant, and put in place the
methodology to encourage sharing surplus

resources among their industry peers.

The Indian government also plans to 

encourage investment in washeries and in
NJMMJPO
UPOOFT

the processing of coal by the steel industry. 

According to estimates made by India’s


largest steel producer, the Steel Authority
of India Ltd, steel production will grow to
about 65 million tonnes by 2011–12, and 
annual metcoke demand from the steel
industry wil increase to about 45 million 
tonnes.       

Source: Analyst secondary research

The Indian government has also set
aggressive targets for steel and electricity
production. India wants its annual steel Table 6 Metcoke market in India, 2007–12 (million tonnes)
output to climb to more than 160 million
Projections 2007–08 2008–09 2009–10 2010–11 2011–12
tonnes by 2020, while power generating
Import of metcoke 27.77 29.76 31.83 34.11 36.55
capacity – using a mix of hydro, fossil,
Coal-based 74,907.5 78,097.5 88,000 96,500 104,000
nuclear and non-conventional energy
generating capacity
sources – is to increase to 400,000 MW by
(MW)
2030 from the existing 130,000 MW. This
Note: all figures are in million tonnes and the projections are based at sustained GDP growth rate of 8%
is set to increase the demand for coke in the
per annum. For the last financial year 2006–07 import stands at 30.69 million tonnes.
global market, as India has underdeveloped
and poorly maintained reserves and to
Source: Ministry of Coal Government of India/Ministry of Power
add to this the ash content of domestically
produced metcoke is too high. By 2012
India will closely meet its demand for minimum time required for a mine to start Political impacts
metcoke by producing 44 million tonnes, production is five years).
leaving a deficit of 12 million tonnes which Ministry of Coal
can be imported. However, the washeries This calls for a rebalancing of demand and In India all coal/coke related operations are
and new plants that might be productive supply by reducing and increasing price. regulated and run by the Ministry of Coal.
by 2011 will make up for that import (the It is responsible for the development and
exploitation of the country’s coal reserves.

 Industry Insight
 It supervises the pricing, distribution,
Figure 4 Projections of supply of metcoke in India, 2006–12 (CAGR 13.12%)
production, conservation, acquisition and
 supply of such reserves. It allocates coking
coal reserves for metallurgical purposes on
a long-term basis and monthly allocation of
 coal is made at Coal India Limited (CIL). It is
also responsible for administrating existing
washeries and for the development of new
 washeries. It administers all the related
NJMMJPO
UPOOFT

public sector enterprises. So far, it has

nationalised 226 coking coal collieries and

711 non-coking coal collieries. The following
organisations are under the control of the
Ministry of Coal:


• Coal Controller’s Organisation


       • Coal Mines Provident Fund Organisation

Source: Analyst secondary research

• Commissioner of Payment Office.
Figure 5 Projections of import of metcoke in India, 2006–12 (CAGR 7.48%)
Nationalisation
 The nationalisation of India’s coal and coke
mines was accomplished in two phases, as

described below.

Coking Coal Mines Nationalisation Act
 1972 – This Act nationalised all coking
coal mines and coke oven plants (other
NJMMJPO
UPOOFT

 than those with the Tata Iron and Steel

Company Limited and Indian Iron and

Steel Company Limited) and brought them
under Bharat Coking Coal Limited (BCCL),

as a new central government undertaking.
 The company was facing losses until 2004
and a revival plan was devised to increase
 coal production and focus on adding value.
      
The quality of coal and an increase in
Source: Analyst secondary research production of raw coking coal was given
priority. A fixed price for prime washed

 Industry Insight
coking coal was acquired from SAIL as an
investment. By 2006 the ailing unit had
been revived as a result of goodwill from
the market, and washed coking coal showed
growth of 25% in financial year 2005–06,
although the current financial year 2006–
07 only saw growth of 0.3%. The unit
supplied around 2.2 million tonnes of coal
to SAIL/IISCO in 2005–06. The company
also benefited from CIL waiving its principal
loan and interest to allow the company to
break even. The company is expected to
achieve positive net worth by 2010.
The Coal Mines Act 1973 (Taking Over of
Management)
This act extended the right of the Indian
government to take over the management
of the coking and non-coking coal mines
in seven states, including the coking coal
mines already taken over in 1971.
Main regulatory bodies
Coal India Limited (CIL)
CIL is India’s prime energy producer. It
contributes almost 90% of the country’s
coal production and is the largest fully
government owned public sector enterprise.
CIL employs over 452,000 people with
man productivity of 3.26 tonnes. In
2006 CIL produced 11.88 million tonnes
of metcoke and 10.74 million tonnes of
non-metallurgical coking coal. Since the
nationalisation of the coal industry, CIL has
managed land, mines and or plants through
its subsidiary companies.
10
CIL has an equity base of Rs6,316 billion
(€78.9 billion) and is the holding company
of seven coal producing companies:
• Bharat Coking Coal Ltd
• Central Coalfields Ltd
• Mahanadi Coalfields Ltd
• Eastern Coalfields Ltd
• Western Coalfields Ltd
• Southeastern Coalfields Ltd
• Northern Coalfields Ltd
• Central Mine Planning and Design
Institute Ltd.
In the past few years CIL has also
engaged in overseas mining to overcome
the shortage in India. CIL has formed a
subsidiary, Coal Videsh Limited (CVL),
to acquire coal blocks in a number of
countries including Indonesia, South Africa
and Australia. Coal produced by CVL may
be brought into India to meet domestic
demand in the future.
Foreign direct investment
CIL governs the development and
exploitation of coal, coke and lignite
reserves. For captive consumption and
washeries, 100% foreign direct investment
is permissible in coal mining. Indian
metcoke manufacturers are keen to buy coal
mines abroad; Gujarat NRE Coke acquired
three mines in Australia in 2005 to help
tackle the coal crisis in its home market. The
company expects to yield 3.5 million tonnes
of high-quality hard coking coal in 2007
alone, and to generate 1.4 million tonnes of
metcoke once it is shipped to Gujarat NRE’s
plants in India.
Foreign collaboration has become
imperative in order to meet the growing
demand for metcoke in India. Different
measures have been taken to achieve this:
• FDI in terms of financial assistance.
• Management and skill development
training for existing workforce.
• Introducing new technologies and
upgrading existing technologies for
opencast mining.
• Import of related equipment not
manufactured in the country.
• Bilateral cooperation.
• Inviting global tenders to achieve higher
productivity in Indian mines.
Pricing control
Until 2000 prices were controlled by the
central government under the Colliery
Control Order, but this was revised in
January 2000 on the recommendation of
the Bureau of Industrial Costs and Prices
(BICP). This resulted in the deregulation of
Industry Insight
metcoke in India, and pricing since then has
been the responsibility of CIL. Hard coking
coal and the small anthracite markets are
seeing tighter supply and therefore higher
prices; semi-soft coking coal appears
balanced.
In the last quarter of 2006 the price of
imported metcoke rose by 48% to reach
$190 (€95.64) per tonne. Indian analysts
suggest that it would be wiser to produce
coke in the country by owning coal mines.
Domestically made low-quality metcoke
costs $60 per tonne. Sector analysts predict
that the price will remain stable, as rising
prices of imported coke will be balanced by
the reduction in import tariffs. However, as
the price of high-quality metcoke falls this
will further push down the price of weaker
grades of coking coal. This will affect the
domestic metcoke industry as a whole.
The Indian metcoke industry saw falling
coke prices in 2004–05 as a result of
increases in the production and supply
of metcoke by countries like China and
Indonesia. The price of metcoke may also
drop sharply due to the investment in coal
mining. And with import duty zeroed, the
price of imported coke will also decline.
As China’s resources are overstretched,
Australia is seen as the second best supplier
of metcoke for India. Many Indian coke
manufacturers have long-term contracts
with Australian mines. This has also led the
steel industry (the main user of metcoke in
India) to consider backward integration by
setting up captive coke ovens to help reduce
imports.
11
Because of an ongoing disagreement
between India and China following the
import and export of iron ore in exchange
for metcoke, China recently increased duty
on metcoke, resulting in a price increase
of almost 10%. Some believe the reason
for this could be China’s desire to conserve
its declining resources; on the other hand
Indian steel companies are lobbying to curb
iron ore exports to China in future as the
market is expected to grow by 85 million
tonnes by 2010. However, this would have
little impact on prices due to the declining
value of the dollar and the country’s
reduced dependence on imports.
Economic impacts
In 2020 India will follow the US and China
as the world’s largest economies in terms of
purchasing power parity (PPP). India’s GDP
per capita is projected to increase twofold,
amounting to $5,000 with a growth rate
of 8%. The rate of population growth will
also increase at 1.5%. All these factors
would require infrastructure, causing steel
production to triple in 15 years leading
to more and more imports of metcoke
and the creation of new washeries. It has
been established that the steel industry
itself would cause threefold growth in
consumption of metcoke by 2020 bringing
the amount to 70 million tonnes compared
with the present 28 million tonnes.
Technology impacts
Technological advances in the metcoke
industry have helped reduce the burden on
domestic resources of metcoke and lowering
imports, too. As a result the total coke
requirement has fallen to 9% of domestic
coal production.
India is using the eco-friendly method of by-
product coke ovens (steel plants) and non-
recoverable coke ovens or NRCOs (foundries,
blast furnaces, etc.) to produce its metcoke.
In order to meet the growing demand from
the steel sector NRCOs are being upgraded
and constructed. The technology requires
less investment and is more flexible in
operation. Both technologies wre developed
and designed in India.
Stamp charging technology
This process is used to augment the strength
of hard coke using a blend of domestic high
and medium coking coal supplemented by
imported coking coal in limited quantities.
It offers significant potential for reducing
the costs of coke production, as it enables
the economical manufacture of superior,
constant quality coke, even from high
volatile and inferior quality coal (petrol coke
and coke dust can be utilised in the coal
blend). The old conventional batteries are
replaced in the new coke oven batteries in
TISCO plants to increase the strength of
domestic coke blends by supplementing
them with imported coke.
PBCC and tall coke ovens battery
technology
SAIL and RINL felt stamp charging
technology was uneconomical, so adopted
the partial briquetting of coal charge
(PBCC) technology and tall coke ovens
battery technology in their steel plants to
maximise the use of imported coking coal
Industry Insight
in the coal blend, which augmented the FIGURE 6 The manufactue of low ash metcoke – a destructive distillation process
strength of metcoke.

Coal dust injection and oxygen

enrichment technology *ODPNJOH
DPLJOH
*NQVSJUJFT $PBM
JT $PBM
JT
TDSFFOFE
Steel producers are increasingly adopting DPBM
JT
QMBDFE
JO
TFQBSBUFE DSVTIFE GPS
TJ[F
BOE
DPLJOH
DPBM PWFSTJ[FE
MVNQT
coal dust injection and oxygen TUPDLZBSE BSF
SFDSVTIFE
enrichment technologies in their blast
furnaces to reduce their coking coal
requirements. Superior quality non-coking
coal is used for coal dust injection.

Corex technology 4UPSBHF $VUUJOH
PG %JTDIBSHF
PG $IBSHFE
JO

Corex technology is mostly used by mini
steel industries to eliminate the use of
coking coke in production, facilitating the
use of gas or thermal coal instead. They use
electric arc furnace technology to produce
steel. These innovative technologies will
help reduce demand for metcoke in the
steel sector.
India has a good reserve of low volatile
high rank (i.e. bituminous) coal: around
7.9 billion tonnes in Jharia and 496 million
tonnes in East Bokaro CF. The coal has
many of the properties of medium coking
coal, except that the ash content is >35%.
Beneficiation or washing of such coal gives
a lower yield so the economics are not
EJTQBUDI DPLF
JOUP
TUBOEBSE
TJ[FT
Source: IntertechPira
feasible and at present it is being used by
the non-metallurgical sector. It can be used
as blends if suitably washed, but improved
technology over the existing washeries may
be required. However, lack of innovation
and adaptation to Indian conditions
is resulting in the large-scale import of
metcoke and lower production.
DPLF
BOE PWFO
GPS
TQSBZFE
XJUI DBSCPOJTBUJPO
XBUFS
The destructive distillation process is used
in many metcoke production units across
the country. It removes volatile matter from
coal, strengthening the product to yield
better productivity and efficiency. ISPs like
TISCO and the Gujarat NRE coke production
unit use this process to manufacture low ash
metcoke or ‘lamcoke’.

12 Industry Insight
 Market analysis
India has a proven reserve of 15 billion
tonnes of high-quality metcoke; yet it faces
a shortage and relies heavily on impors
from China. It has many coalfields that are
unexploited and waiting for new policy to
come in.
Geological reserves
India’s total coal reserve during the financial
year 2006 is 253 billion tonnes, of which
32 billion tonnes is coking coal. Some 17
billion tonnes is proven reserve, 13 billion
tonnes is indicated and 2 billion tonnes is
inferred. Sources are Bharat Coking Coal
Ltd (BCCL), Central Coalfields (CCL) and
Western Coalfield (WCL). However, India
has a smaller proven reserve of prime and
medium coking coal.
Production
Total coal production during 2005–06 was
around 407 million tonnes; however, the
share of coking coal production has gone
down from 14% to 7.7% in the past three
years. The production (raw and washed
coal) figure stands at 22.2 million tonnes
(as at the end of December 2006) against
30.3 million tonnes in 2005. An increase of
3% is expected in 2007.
Supply and demand
India’s merchant metcoke capacities are
largely situated in western India, logistics
13
and proximity to a large consumer market
being the primary factors contributing to
this skewed concentration. However, eastern
India is dominated by a large number of
small metcoke plants and government-
owned coke plants have a cumulative
capacity of around 50 million tonnes a year.
The steel sector accounts for 8% of India’s
coal demand, and 5% of domestic offtake.
The national steel policy (NSP) envisages
steel production increasing from 38 million
tonnes in 2006 to 110 million tonnes by
2019–20. The coking coal requirement
is expected to increase from 27 million
tonnes to 70 million tonnes by 2019–20.
However, the quality of Indian coking coal
is not suitable for steel making. Domestic
coking coal requires intensive washing to
make it suitable for coke making and then
it remains marginally acceptable because
of its ash and inert material content. The
Indian steel industry imports high-quality
coking coal, which is also blended with
poor-quality domestic prime coking coal.
The industry is also initiating alternative
fuels like tar, or coal dust injection in blast
furnaces to reduce coke consumption.
Drivers of growth
The key driver of growth in demand of
metcoke is buoyant demand in the steel
industry. However, steel-making technology
will also be an important factor in
determining demand. With the proposed
changes in its steel industry India will be
producing more than 60 million tonnes of
steel by 2012, and consuming around 30
million tonnes of metcoke. To meet this
demand, it is estimated that 14 million
tonnes will come from NRCO and the
remaining 17 million tonnes from BPCO.
The steel industry imported around 19
million tonnes of coking coal during 2006.
Coal is imported primarily from Australia
(12.1 million tonnes), with a small quantity
from New Zealand, China, Canada, South
Africa and Indonesia. The price of imported
coal depends on the source of supply,
consignment port and grade.
The following are the key drivers of growth
in metcoke demand:
• Growth in the steel industry has propelled
the requirement for metcoke. The steel
market will grow strongly in India until
2010, causing continued demand for
coking coal for steel manufacturers.
Domestic steel demand is projected at
52 million tonnes by 2011–12, rising to
100 million tonnes by 2020. India is also
considering bartering its domestic iron
ore in return for metcoke from China to
ensure adequate supplies.
Industry Insight
• There are two factors that have
significantly driven the production of
metcoke over the past five years in India:
first, stable coal prices and second, the
burgeoning growth in the large-scale
Indian production of metcoke.
• Feasible uses of by-products have been
established as profitable enterprises: for
example, coke breeze and coke oven gas
has found a use in various industries.
• New breakthroughs in technology have
played a vital role in kick-starting several
metcoke production projects in India.
Although they are in the early stages
at present, in years to come they will
be potential metcoke supplying units.
Durgapur’s and Hooghly Met Coke’s
production units are good examples of
such projects.
14
• FDI has opened doors for the metcoke
industry. Whereas foreign companies are
tapping into Indian resources, Indian
companies have also acquired a sizeable
number of coal and coke mines for
the production of metcoke in several
countries.
• India is the second largest cement
• The rising cost of metcoke in the
international market has led Indian
metcoke buyers/importers to rethink
their strategy for developing their own
resources.
• Various methods have been derived to
make utmost use of the low-quality coke
available in India. High derivatives of
metcoke are being produced across the
country by mixing good quality imported
coking coke.
• As more and more steel players are
emerging in the country due to the
surging growth in the steel market, more
ISPs will soon be seen in the Indian
market, especially after the notable
Mittal-Arcelor and Tata-Corus mergers.
producer in the world. The population of
the country is estimated to surge, calling
for new homes to be built, and Indian
infrastructure is forecast to see potential
growth in the years ahead. This would
place huge demands on the cement
industry, i.e. growth at the rate of 8%
a year. As the cement industry requires
metcoke for its production unit, increased
demand for metcoke is also expected
from this sector.
Industry Insight
 Company profiles

This section profiles India’s key players in Table 7 Top metcoke producers in India
the production of metcoke. Table 7 shows
Companies Annual metcoke production,
their ranking on the basis of production in
2006–07 (million tonnes)
2006.
SAIL 20–22
RINL 4.5
Leading company profiles
CIL 4.5
TISCO 3.0
1. Gujarat NRE Coke
DPL (Durgapur Projects Ltd) 1.0
Company background
Others 4
Gujarat NRE Coke is the largest non-
Note: others include Gujarat NRE, Saurasthra Fuels, Sesa Goa, and Hooghly Met Coke
captive manufacturer of metcoke in India,
manufacturing low ash metcoke for the steel
Source: Mecon Inventory
industry, soda ash plants, zinc smelters and

Table 8 Major metcoke producers’ products and exports

Company Product Export

SAIL Stainless/alloy steels, pig iron, hot rolled sheets and coils, cold rolled Plate mills plates, CR sheets, CR coils, wire
sheets and coils, galvanised sheets and coils, plates, electrical steel sheets, rods in coils, mild steel billets, HR sheets/plates,
tin plates, rails, wheels and axles, structurals, bars and rods and pipes, HR coils, GP coils, chequered sheets, chequered
billets/blooms/slabs plates, electrical steels, wire rods, rails
RINL Pig iron, billets, sheet and strip, alloy steel sheet, chemical products, Wire rods, bars, angles, channels, beams, rounds
asphalt, tar and bituminous products and billets, pig iron, granulated slag and coal
chemicals
TISCO Iron, steel, hot rolled sheets and coils, cold rolled sheets and coils, Steel products, chrome ore and concentrates,
galvanised sheets and coils, plates, electrical steel sheets, tin plates, manganese ore
rails, wheels and axles, structurals, bars and rods and pipes, billets/
blooms/slabs, plates
DPL (Durgapur Projects Ltd) Steel, power, metcoke, fuel gas (methane, hydrogen, water, carbon, oxides Chemicals and steel alloys
and hydrocarbons), by-products such as coke oven gas and crude coal tar
Gujarat NRE Steel, zinc, soda ash, chemicals, power, metcoke and lamcoke Metcoke and lamcoke

Source: IntertechPira

15 Industry Insight
foundries. It has two manufacturing plants
with a capacity of 1 million tonnes a year. A
third one will be operational by June 2007,
bringing total production to 1.4 million
tonnes. Revenues have doubled in 2006
and exports have shot up fivefold.
The company also deals in the export of
metcoke on a smaller scale, but expects to
raise this to 25% of its total production in
2007. First quarter results for 2007 show
an increment of 81%. The company has
also diversified into production of steel,
petroleum prospecting and wind-power
generation. After the acquisition of several
mines in Australia the company is listed
on the Australian Stock Exchange. The
company credits its best business practices
with its market success in India and abroad.
The other subsidiary companies are:
• Bharat NRE Coke Ltd
• Gujarat NRE Australia Pty Ltd
• Gujarat NRE FCGL Pty Ltd.
Company snapshot
Managing director: Mr A. K. Jagatramka
Partners/alliances: FCGL Industries Limited
Products types covered: Manufacturing of
metcoke, steel, petroleum and wind power
Headquarters: India
Employees: 715
Turnover 2006: $8.48 billion (€4.26 billion)
Stock exchange: Mumbai and Australia
16
2. Hooghly Met Coke and Power
Company Ltd
Company background
This is a joint venture between Tata
Steel Ltd and West Bengal Industrial
Development Corporation Ltd (WBIDC).
The unit is expected to supply good quality
metcoke to Tata Steel and exports the
surplus. At present Tata Steel has raised
its steel production capacity resulting in
2.5 million tonnes of metcoke. Its in-house
production is 2.3 million tonnes and it
outsources 0.2 million tonnes of metcoke.
Low ash coking coke is used to produce
metcoke by this particular unit and it is
envisaged to produce results by July 2007.
The annual coke production capacity of the
unit is 1.6 million tonnes. The Tata group
has already bagged $18.3 million worth of
orders from HMCPCL. The unit’s proximity
to Haldia Dock in west Bengal makes it
easy to source imported coke and export
met. Hooghly Met Coke currently imports
raw materials from Australia, Canada and
Indonesia.
Company snapshot
Managing director: Dr T. Mukherjee
Products types covered: Manufacture of
metcoke, steel and power
Headquarters: India
Global presence: Worldwide
Employees: Approximately 1,000 (HMCPCL)
Turnover 2006: $51.6 million (total revenue
of Tata the parent company)
Stock exchange: Mumbai
3. Steel Authority of India Limited
(SAIL)
Company background
SAIL is one of India’s leading integrated
steel producers. In view of the growing
steel market in India, the company has
increased its production target. To achieve
this target, SAIL has tied up with India’s
largest merchant cokery, Durgapur Projects
Ltd (DPL) (a division of SAIL). The cokery
produces metcoke in a blast furnace using
imported coke and provides supplies on a
monthly basis. DPL generates metcoke out
of 30,000 million tonnes of coking coal per
month. The company is also building coke
oven batteries in Bokaro.
At present SAIL imports 60% of its coking
coke, with the remaining 40% supplied
by CIL. However, these two steel and coal
majors are considering floating a joint
venture for overseas mine acquisitions. SAIL
merged with Konark Met Coke Ltd (KMCL)
in 2006. KMCL was established in 1996
to produce coal, coking coal and coke,
but the metcoke producing company was
merged with steel giant NINL in 2004. It
can produce 8.82 million tonnes of metcoke
a year. Last year the company sold 2.49
million tonnes of blast furnace coke.
Company snapshot
Chairman: Mr S. K. Roongta
Products types covered: Manufacture of
metcoke, steel and power
Headquarters: India
Employees: 131,910
Turnover 2006: $6.4 billion
Stock exchange: Mumbai
Industry Insight
4. Sesa Kembla Coke Company Ltd)
Company background
The company was started as a bilateral FDI
unit in collaboration with Kembla Coal and
Coke of Australia. In March 2004 it merged
with parent firm Sesa Goa. It manufactures
and sells metcoke but 60% of its production
is consumed in Sesa’s manufacturing of pig
iron; the rest is sold on the open market. The
company produces around 280,000 tonnes
of metcoke a year. However, the coking coke
contract for 2007 was settled for a price
15.5% lower than in 2006. The company’s
metcoke unit was already under pressure as
it faced a 10% decline in the last quarter of
2006 due to the increased cost of Chinese
metcoke.
Company snapshot
Chairman: S. D. Kulkarni
Products types covered: Manufacturing of
metcoke and pig iron
Headquarters: India
Employees: n/a
Turnover 2006: $4.8 million (only through
the sale of 0.24 million tonnes of metcoke)
Stock exchange: Mumbai
www.intertechpira.com
17
5. Indian Iron and Steel Company
(IISCO) About IntertechPira
Company background
IISCO is the oldest integrated steel plant IntertechPira is an information
in India; it began operations in 1874 and
provider and publisher of market
was nationalised in 1972. It is one of the
reports. Our core areas are:
major ISPs in the country with captive mines
and washeries at Chasnalla and Jitpur for
the supply of metcoke. New investment in
modernisation of the plant, new sinters,
blast furnace, coke oven batteries and other Alternative energy
expansion is underway. By 2010 the plant Batteries, fuel cells and capacitors
aims to produce 2.5 million tonnes of crude
Biomaterials
steel. At present it produces 0.85 million
Inks and pigments
tonnes of blast furnace coke. With the new
investment it is projected to produce 2.5 LEDs, lighting and photonics
million tonnes per annum of metcoke by Minerals and metals
2011–12. Nanomaterials
Nonwovens and wipes
Company snapshot Organic electronics
Managing director: Mr N. Roy
Packaging
Products types covered: Manufacturing of
Paper and natural fibres
steel, metcoke and pig iron
Headquarters: India Printing and publishing
Employees: 12,000 Regulatory
Turnover 2006: $6.28 million Security and biometrics
Stock exchange: Mumbai
Industry Insight