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| Keshav Beriwala, Director, Shyam Steel India Ltd. |
DRI (Direct Reduced Iron) industry perspective on India's strategic shift away from imported coal :-
"For DRI, industry has been mostly using imported coal because of which the industry is exposed to wild price swings. So it's important we use more of domestic coal." - Keshav Beriwala, Director, Shyam Steel India Ltd.
Three Key Reasons to Shift from Imported to Domestic Coal
1. Price Volatility of Imported Coal
DRI industry primarily imports coal from South Africa; index has wild price movements
Example: price can swing from $90 CIF Kolkata one month to $100–$110 the next
Makes cost predictability impossible for long-term steel producers
Sustainable costing mechanism is critical for industry viability
2. Forex Savings & Trade Deficit Reduction
India currently imports ~200 billion tons of thermal coal annually
Estimated cost: $18–20 billion/year in coal imports
India has domestic production capability — imports driven by unresolved structural issues
Represents a significant chunk of currency/trade deficit that could be eliminated
3. Energy Sovereignty & Geopolitical Risk
Coal is a strategic national asset
Dependency on South Africa, Indonesia for coal = major sovereignty risk
Parallel drawn to pressure India faced over Russian oil amid global tensions
Risk scenario: sanctions on supplier countries could leave India's steel industry stranded
DRI Industry Challenge: Scaling Kiln Sizes
Key trend over last decade: kiln sizes have grown significantly
Earlier: 100 ton/day kilns
Now: 600, 700, 800, even 1,000 ton/day kilns are increasingly becoming common.
Coal used in kilns both as fuel and reductant to produce sponge iron and larger kilns introduce new challenges in transitioning to domestic coal.
