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Government confident of coal production worth 1 billion ton in FY 2023-24: How much coal has been India producing in last 10 years?

By: Team India Tracker

Government confident of coal production worth 1 billion ton in FY 2023-24: How much coal has been India producing in last 10 years?

The government has taken several steps in order to reduce imports and maintain a constant supply of coal in the country. Image Source: IANS

Talking about the coal production in the last fiscal 2023-24, the production in the country reached an unprecedented milestone, crossing 900 million tons (MT) as on March 06, 2024, setting the stage to approach the ambitious 1 billion ton (BT) target by March 31, 2024.

India produced 78.69 MT (Provisional) of coal in April 2024, up 7.41 percent from the same period the year before, when the country produced 73.26 MT. Coal India Limited (CIL) produced 61.78 MT (Provisional) of coal in April 2024, up 7.31 percent from the same period in the previous year when it produced 57.57 MT. Furthermore, the amount of coal produced by captives and other sources in April 2024 was 11.43 MT (Provisional), an increase of 12.99 percent over the previous year's 10.12 MT.

India's coal exports for the month of April in 2024 totaled 85.10 MT (Provisional), a 6.07 percent increase over the same time in the previous year (80.23 MT). 64.26 MT (Provisional) of coal was shipped by CIL in April 2024, an increase of 3.18 percent over the same time in the previous year (62.28). Furthermore, the amount of coal dispatched by captives and other parties in April was 15.16 MT (Provisional), which is a 26.90 percent increase over the previous year's 11.95 MT.

Talking about the coal production in the last fiscal 2023-24, the production in the country reached an unprecedented milestone, crossing 900 million tons (MT) as on March 06, 2024, setting the stage to approach the ambitious 1 billion ton (BT) target by March 31, 2024. 

Furthermore, there was an abundant supply of coal—roughly 85 MT—available with coal businesses, and as of March 5, 2024, domestic thermal power plants maintained coal reserves of 43.28 MT, guaranteeing a steady supply of electricity throughout the nation. The record-breaking coal production and ample coal stock make it easier to fulfil the rising demand for electricity, particularly during periods of peak consumption, which promotes stability in the energy sector and boosts economic growth. India's accomplishment of producing more than 900 MT of coal increases energy security and lessens reliance on coal imports, which saves a significant amount of foreign exchange.

For the period of 2008–09 to 2013–14, the coal output CAGR was 2.8 percent. Only 725.39 MT of coal would have been produced in 2022–2023 if this trend had persisted. The government's persistent proactive measures have resulted in a 5.20 percent CAGR, with 893.19 MT of production in 2022–2023 as a high. This 167.80 MT increase in production (savings of approximately Rs 2.71 Lakh Crore) has contributed to a decrease in the import of coal.

Source: Ministry of Coal

*Up to March 06, 2024

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.

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 FY 2023-24.

For the fiscal year 2024-25, domestic coal production is projected to reach 1111 MT, while domestic demand is estimated at 1290 MT. Consequently, the share of imported coal is anticipated to reduce below 15 percent, potentially yielding substantial forex savings.

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