A Discussion on Non-coking Coal Pricing Systems Adopted in Different Countries

Abstract

Coal is a critical input for power, fertilizer, iron and steel (I&S) and the cement sector. At times up to 75 per cent of the power generated in India is coal fired.1 Besides being used on a large scale as domestic and eateries fuel, coal also plays an important role in paper, brick kiln and chemical industries. Except for I&S, every other consumer uses coal primarily for its inherent thermal properties, that is, heat generated during combustion. That precisely is the reason why in international nomenclature, the terminology non-coking coal has been replaced by thermal coal. Apart from combustible material, coal also contains noncombustible impurities and is represented essentially by its ash content. Ash is the solid incombustible residue obtained after burning the coal. Moisture content is another negative quality parameter of coal. It could be either inherently present in coal or could get added during mining, cleaning, transport, stock-piling, etc. Coal price and pricing and its socio-economic impact have become a major subject of concern and therefore for debate in recent times. For the first time in the modern history of India, coal has become an important political issue. Coal consumers in India believe that total moisture content in the coal used by them quite often is rather unreasonably high. All other negative quality parameters of coal, physical or chemical in nature, are in some or the other way associated with the ash content and ash composition of coal.