Views of Dr Anindya Sinha

“The target is to attain 1.2 bt of coal production by 2023-24”

Coal continues to be the primary source of electricity generation in the country. As per an environment impact assessment report, around 57 per cent of the country’s installed capacity is coal-based and coal accounts for 73 per cent of the total electricity generated. It constitutes about 30 per cent of the all mineral production in value terms. While the share of coal in the overall energy mix is expected to reduce due to increasing solar power generation, coal production, in absolute terms, is slated to increase in the next few years. At a recent India Infrastructure conference, DrAnindyaSinha, project adviser, Ministry of Coal, shared the ministry’s plans and outlook for the coal mining segment…

Size and growth

As per the Geological Survey of India, the country has a coal-bearing area of around 35,000 square km. Of this, 19,400 square km has coal available within a depth of 900 metres. Of the 19,400 square km, exploration has been conducted for around 15,000 square km. Through its exploration efforts, the country is adding 5-6 billion tonnes (bt) of coal annually to the existing inventory. The country has sufficient coal reserves to meet the demand from various end-user industries for over three decades.

Coal production has grown at a compound annual growth rate of 5 per cent (by about 200 million tonnes [mt]) over 2014-19. The current coal demand stands at 1,016 mt, and is expected to rise to 1,273 mt by 2022-23 and 1.5 bt by 2030, as per various estimates. In 2018-19, domestic coal production and supply were to the tune of 730 mt and 734 mt respectively. In 2019-20 (till January 2020), the country produced 555 mt of coal and supplied 576 mt. Coal production for the ongoing year (2019-20) is expected to exceed 800 mt. Despite being the second largest producer in the world, the country still imports coal. In 2018-19, around 235 mt of coal was imported, of which 50 mt was coking coal. While coking coal is available in the country, its quality is not up to the mark. Thus, India will continue importing coking coal for meeting its requirements. In 2019-20 (till November 2019), around 165 mt of coal was imported.

Coal India Limited (CIL), the country’s largest coal producer, has an ambitious production target of 1 bt by 2023-24. Taking output of other producers into account, the target is to attain 1.2 bt of coal production by 2023-24. To achieve this tall target, the Ministry of Coal has decided to open up the coal mining segment to ramp up production. Recently, the Mineral Laws (Amendment) Ordinance, 2020, was passed. The ordinance does away with the restriction on the end use of coal. After the auction of 33 coal blocks, the coal ministry has identified another 50 blocks to be auctioned. Of these, 40 coal blocks will be auctioned for commercial sale of coal. The ministry expects a good response from bidders in the upcoming round. In the next five years, it plans to auction over 200 coal blocks to achieve a peak rated capacity of over 500 mt.

Steps taken by the Ministry of Coal

To reduce dependence on coal imports and support domestic production, the coal ministry is taking a number of measures:

  • It is taking steps to ensure that the requirements of coal companies are being met in advance through expediting land acquisition, and environment and forest clearances.
  • CIL has plans to start 55 greenfield and 193 brownfield coal projects.
  •  Non-operational mines will soon be operationalised.
  • Within a span of five years, the ministry aims to switch to mechanised transport of coal at large mines to reduce the dependence on road transport. Close to 620 mt of coal is targeted to be transported through piped conveyors by 2023-24.
  •  Companies will be incentivised to set up coal gasification plants in their coal blocks. Underground coal gasification is also being promoted.
  • CIL and its subsidiaries are free to mine coal and methane gas from their coal bed methane blocks without seeking permission from the Ministry of Environment, Forest and Climate Change. CIL has a number of coalfields such as the Jharia and Raniganj coalfields that have sufficient availability of methane gas. CIL, with the help of the ministry, will undertake extraction of methane gas using advanced technology.

In sum

Most of the country’s demand for coal can be met through domestic production. Regulatory support has been provided to various end-user industries to mine coal for captive use as well as commercial sale. With 100 per cent foreign direct investment being allowed, the government has eased the entry of more players to provide a fillip to the coal industry.

 

 

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