India is taking decisive steps to improve the efficiency and sustainability of its coal sector by requiring miners to wash coal before selling or using it, local media reported.

This move, aimed at enhancing energy security and environmental efficiency, aligns with the country's broader strategy to reduce coal imports, boost domestic production, and improve the performance of its thermal power plants.

India's domestic coal production rose 11.65% to 997.26 million tonnes in FY2023-24 from 893.19 million tonnes in FY2022-23. The country aims to enhance production to 1.08 billion tonnes in FY2024-25 and further reach 1.5 billion tonnes by FY2029-30. India's coal demand has also surged from 1.12 billion tonnes in FY2022-23 to 1.23 billion tonnes in FY2023-24.

However, the government's focus goes beyond quantity. Sources revealed that a new policy push is underway to make coal beneficiation – a process of removing impurities to improve coal's calorific value – mandatory before transportation.

This initiative is designed to improve the efficiency of thermal power plants and the steel industry, reduce logistics burdens by eliminating waste like stone lumps, which would reduce the number of railway rakes needed for coal transport. It will also promote exports of higher-quality coal while cutting down imports of washed coking coal.

India currently has over 40 coal washeries operating at less than 50% capacity. The government plans to utilize this idle capacity for beneficiation. In particular, state-run Coal India Limited (CIL) is focusing on monetizing its aging washeries to increase the availability of washed coking coal, which is critical for the steelmaking process. However, efforts to lease four old washeries under CIL have faced challenges due to a lack of bidder participation.

Bharat Coking Coal Limited (BCCL), a wholly-owned subsidiary of CIL, is exploring partnerships with private steel companies to enhance coal washing capacity.

BCCL is in discussions with four steel companies to develop new coal washeries on its land, with an aggregate capacity of 7.1 million tonnes per annum (Mtpa), and to utilize coal supplied by the miner for powering captive thermal plants at steel mills. Additionally, BCCL is planning to ramp up its own washing capacity from 1.5 Mtpa to 2.5 Mtpa by the end of the current fiscal year.

The company is also exploring the monetization of low-grade coal by partnering with private steel mills to process the coal, making it suitable for use in steel manufacturing.