**Policy Summary: Diversifying Coal Usage and Reducing Dependence on Imports**
In August 2021, the Ministry of Coal launched "Mission Coking Coal" to enhance domestic coking coal production and decrease import reliance, particularly for the steel sector. Significant progress has been made under this mission, including an increase in domestic coking coal production from 44.79 MT in FY21 to 66.47 MT in FY25. Coal India Limited (CIL) has offered 11 discontinued coking coal mines to the private sector via a revenue-sharing model and commissioned the New Madhuband Coking Coal Washery of Bharat Coking Coal Limited (BCCL) with a 5 MTPA capacity in FY24. CIL has also monetized one coking coal washery.
Further initiatives include amending the Non-Regulated Sector (NRS) linkage auction policy in 2020 to extend coking coal linkages for up to 30 years, aiming for positive impacts on coal import substitution. In March 2024, a new subsector, Steel using Coking coal, was created under the NRS linkage auctions via the WDO route, to increase domestic coking coal consumption and availability of washed coking coal.
Several new coking coal washeries are in various stages of development: Bhojudih (2.0 MTPA, West Bengal) and Patherdih II (2.5 MTPA, Jharkhand) are under construction, with expected completion in FY2025-26 and FY2026-27, respectively. New Moonidih (2.5 MTPA, Jharkhand) is in the tendering contract agreement stage, while contracts are signed for New Kathara (3.0 MTPA, Jharkhand). Letters of Intimation have been issued for New Rajrappa (3.0 MTPA, Jharkhand) and New Sawang (1.5 MTPA, Jharkhand). Dhori (3.0 MTPA, Jharkhand) is in the tendering stage, and a Letter of Award has been issued for Basantpur-Tapin (4.0 MTPA, Jharkhand). The total capacity of these washeries is 21.5 MTPA. Completion timelines for New Moonidih, New Kathara, Basantpur-Tapin, and New Sawang are projected for FY2028-29, while New Rajrappa and Dhori are slated for FY2029-30.
Coal distribution is managed transparently by Coal PSUs, following policies and guidelines issued by the Ministry of Coal. Key policies include the New Coal Distribution Policy (NCDP), the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI), the Linkage Auction Policy for Non-Regulated Sector (NRS), the Bridge Linkage Policy, Single Window Mode Agnostic Auctions, and Linkage Rationalization. Coal supply to consumers is governed by Fuel Supply Agreements between coal companies and consumers.
This information was provided by Union Minister of Coal and Mines Shri G. Kishan Reddy in a written reply in Rajya Sabha.
Key Entities Referenced
Ministry of Coal: The government ministry responsible for coal production and distribution policy.
Mission Coking Coal: A government initiative launched in August 2021 to increase domestic production of coking coal in India and reduce reliance on imports.
CIL: Coal India Limited, a state-owned coal mining company.
BCCL: Bharat Coking Coal Limited, a subsidiary of Coal India Limited.
Madhuband Coking Coal Washery: A coking coal washery of BCCL with a capacity of 5 MTPA, commissioned in FY24.
Non-Regulated Sector NRS linkage auction policy: A policy related to the auction and allocation of coal linkages for the non-regulated sector.
Bhojudih, West Bengal: Location of a coking coal washery with a capacity of 2.0 MTPA, under construction in West Bengal.
Rajya Sabha: The Upper House of the Parliament of India, where information related to coal policy was presented.
Ministry of Coal
Diversifying Coal Usage and Reducing Dependence
on Imports
Posted On: 11 AUG 2025 2:48PM by PIB Delhi
The Ministry of Coal had launched "Mission Coking Coal" in August 2021 to increase domestic production of
coking coal in India and reduce reliance on imports, particularly for the steel sector. The achievements/
Progress under Mission Coking Coal are as follows,
i. Coking coal production of the country has increased from 44.79 MT in FY21 to 66.47 MT in
FY25.
ii. CIL has offered 11 discontinued coking coal mines on a new innovative model of Revenue
Sharing with the private sector.
iii. New Madhuband Coking Coal Washery of BCCL, having a capacity of 5 MTPA, was
commissioned in FY24.
iv. CIL has monetized one Coking Coal Washery.
Other initiatives to reduce dependence on imports by increasing domestic coking coal production are
Through the Amendment to the Non-Regulated Sector (NRS) linkage auction policy introduced in
(cid:108)
2020, the tenure of coking coal linkages in the NRS linkage auction has been revised for a period
up to 30 years. An increase in tenure of the coking coal linkages in the NRS linkage auction for a
period up to 30 years is expected to have a positive impact on coal import substitution.
A new sub-sector ‘Steel using Coking coal through WDO route’ has been created in March 2024
(cid:108)
under the NRS linkage auctions, which shall lead to an increase in the domestic coking coal
consumption and shall increase the availability of washed coking coal in the country, thereby
reducing coking coal imports.
The current status of setting up of new coking coal washeries are as follows:
S l . C a p a c i t y
Washery Timeline Location Status
No. (MTPA)
1 Bhojudih 2.0 FY2025-26 West Bengal Under Construction
2 Patherdih II 2.5 FY2026-27 Jharkhand Under Construction
3 New Moonidih 2.5 FY2028-29 Jharkhand Stage of Tendering
Contract agreement
4 New Kathara 3.0 FY2028-29 Jharkhand
signed
Letter of Intimation
5 New Rajrappa 3.0 FY2029-30 Jharkhand
issued
6 Dhori 3.0 FY2029-30 Jharkhand Stage of Tendering
7 Basantpur-Tapin 4.0 FY2028-29 Jharkhand Letter of Award issued
Letter of Intimation
8 New Sawang 1.5 FY2028-29 Jharkhand
issued
Total (Coking) 21.5
Coal PSUs follow the policy and guidelines issued by the Ministry of Coal to distribute coal transparentmanner.
The current policies in place are as follows, and these policies are modified as and when required:
New coal distribution policy (NCDP),
(cid:108)
Revised Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI),
(cid:108)
Linkage Auction Policy for Non-Regulated Sector (NRS).
(cid:108)
Bridge Linkage Policy.
(cid:108)
Single Window Mode Agnostic Auctions,
(cid:108)
Linkage rationalization etc.
(cid:108)
The Coal is supplied to the consumer as per the Fuel Supply Agreement between coal companies and the
consumers.
This information was given by Union Minister of Coal and Mines Shri G. Kishan Reddy in a written reply in
Rajya Sabha today.
****
Shuhaib T
(Release ID: 2155004)