India has classified coking coal as a critical mineral, a strategic move aimed at accelerating exploration, easing regulatory hurdles and boosting domestic supply to support the country’s steel industry.
The decision is expected to encourage mining activity by removing key regulatory barriers, including the requirement for mandatory public consultations during certain approval stages, the government said in an official statement. The new classification will also allow the use of degraded forest land for compensatory afforestation—a process in which trees are planted to offset forest land diverted for mining operations.
Heavy Import Dependence Drives Policy Shift
At present, nearly 95 per cent of the coking coal used by India’s steel sector is imported, making the industry highly vulnerable to global price volatility and supply disruptions. Coking coal, which is essential for steelmaking, is sometimes also used for power generation in India, despite being significantly more expensive than thermal coal.
India’s renewed emphasis on coal, one of the most carbon-intensive fossil fuels, reflects a broader energy strategy prioritising national security and economic development, particularly in sectors considered vital for industrial growth.
Steel Industry May Shift to Domestic Coal
Commenting on the move, Rohit Chandra, assistant professor of public policy at the Indian Institute of Technology (IIT) Delhi, said coking coal has often been misused in India.
“Coking coal in India has unfortunately often been used for thermal generation purposes,” Chandra said. He added that the government’s decision could “nudge” the steel industry to rely more on domestically produced coking coal.
Expected Benefits: Lower Imports, Stronger Supply Chains
According to the government, classifying coking coal as a critical mineral is expected to:
- Reduce coal imports
- Strengthen the resilience of the steel supply chain
- Attract greater private sector participation in the mining industry
The move aligns with India’s long-term goal of boosting domestic mineral production, reducing dependence on imports, and ensuring steady raw material availability for key industrial sectors such as steel.