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India 08-Feb, 2024

Coal production till January 2024 rises by 12.18%; How India is eyeing to maximise domestic coal production?

By: Team India Tracker

Coal production till January 2024 rises by 12.18%; How India is eyeing to maximise domestic coal production?

The coal production in FY 2022-23 increased by 14.77 percent to 893.19 MT as compared to 778.21 MT in 2021-22. Image Source: IANS

In the year 2022-23, 96.10 percent of coal production in India was from Open Cast mines (858.342 MT) and the rest 3.90 percent was from Under Ground mines.

In January 2024, the Ministry of Coal reported a notable increase in total coal output, with 99.73 million tonnes (MT) produced. This amounts to a 10.30 percent rise over the 90.42 MT recorded in the same month the previous year.

Source: Ministry of Coal

Compared to 71.88 MT in January 2023, the production of Coal India Limited (CIL) increased to 78.41 MT in January 2024, a 9.09 percent increase. Up until January 2024, the cumulative coal production (up to that point) saw a remarkable 12.18 percent growth, rising to 784.11 MT (Provisional) in FY 23–24 from 698.99 MT in FY 22–23.

In comparison to 716.08 MT in 2020–21, the nation as a whole produced 778.21 MT of coal in 2021–22. Around 28 of the top 37 coal mines produced more than 100 percent of their total output in January 2023, and three other mines produced between 80 and 100 percent. The coal production in FY 2022-23 increased by 14.77 percent to 893.19 MT as compared to 778.21 MT in 2021-22.

Source: Ministry of Coal

It is evident from the above chart that there has been an increase in the domestic production of the coal and decrease in the import of coal in the country. The FY 2022-23 recorded the highest ever domestic production of coal at 893.19 MT and also recorded the lowest import of coal at 186.05 MT. India recorded highest ever import of coal in the year 2019-20. About 248.53 MT of coal worth Rs 15,27,320 million was imported in 2019-20.

In the year 2022-23, 96.10 percent of coal production in India was from Open Cast mines (858.342 MT) and the rest 3.90 percent was from Under Ground mines. Power sector continued to be the largest consumer of coal. In 2022-23, the dispatch of coal to power sector was 786.088 MT (89.60 percent) and other than the power sector, coal was mainly despatched to steel sector (13.826 MT, i.e., 1.56 percent), cement sector (8.119 MT, i.e., 0.93 percent), and sponge iron sector (8.059 MT, i.e., 0.92 percent), among others.

The government has taken several steps in order to reduce imports and maintain a constant supply of coal in the country. Some of the steps are- Regular reviews by Ministry of Coal to expedite the development of coal blocks, Single Window Clearance portal for the coal sector to speed up the operationalization of coal mines, Project Monitoring Unit for handholding of coal block allottees for obtaining various approvals / clearances for early operationalization of coal mines. Apart from this the Ministry of Coal has requested the Ministry of Environment, Forest and Climate Change (MoEF&CC) to allow coal mines with existing Environmental Clearances to increase their production up to 40 percent, to hike by up to 50 percent without Fresh Environmental Impact Assessment or Public Consultation. Talking about the import of coal, according to the current import policy, consumers themselves may freely import coal (under Open General Licence) based on their own needs and commercial discretion.

For ease of doing business, the Ministry of Coal has established a Single Window Clearance System (SWCS) portal. The Ministry’s unique project, SWCS, aims to develop a platform for obtaining multiple clearances for early operationalization of coal mines, which would ultimately lead to an increase in the nation's coal production through a single entry point. In order to provide a boost to the mining sector, 100 percent Foreign Direct Investment has also been allowed for commercial mining. Due to these efforts by the Government, the country has witnessed a massive leap in coal production from 566 MT in FY 2013-14 to 893 MT in FY 2022-23 with a CAGR of 5.2 percent.

NITI Aayog in a draft report estimated that India’s coal demand will increase to 1.1-1.3 billion tons by 2030. Coal India is expected to produce one billion tons by 2025-26. Exploring and utilising the alternate sources of electricity generation is extremely important for the country as India faced massive power outages and crisis in the previous year.

With 737.9 million tons of total dispatches in FY23, a 9.1 percent year-over-year growth, the domestic coal consumption by the power sector is still strong. Dispatches to the electricity industry are expected to keep increasing, according to CareEdge Research, due to rising demand from coal-based power plants. Tanvi Shah, director of CareEdge Advisory & Research, observed that although imports have increased compared to previous year due to greater blending requirements, government measures to increase domestic output will, in the medium to long term, reduce dependence on imported coal. Due to the increased demand, especially in China and India, coal prices are predicted to stay high relative to pre-pandemic averages.

The Ministry of Coal's ongoing efforts to increase coal output and ensure smooth delivery are a testament to India's commitment to satisfying its energy needs and promoting ongoing economic progress. Also, with such efforts and gradual increase in coal production, it can be said that the Ministry of Coal can comfortably achieve the target of producing 1 billion ton coal in the current fiscal year.

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