Coal analysts believe that production will increase by leaps and bounds due to inclusion of the private sector.
New Delhi: India, the second-largest coal-producing country in the world after China, is accelerating its coal production and is expected to be self-sufficient by 2030, surpassing its coal demand of 1.3 to 1.5 billion tonnes. Coal analysts believe that the production will increase by leaps and bounds due to the inclusion of the private sector and may exceed its demand by 2030, if the current trend of government’s emphasis on coal production continues. Also, a lot depends upon the success of megaprojects the Coal India Ltd (CIL) is taking up.
The current trends in the industry are showing an upsurge, as per the recent data of the Ministry of Coal, an aggregate growth of 8.55% was seen in coal production. The total coal production during 2021-22 touched 777.23 Million Ton (MT) compared to 716 MT during 2020-21.
To boost production, the government is actively inviting the private sector to make private production reach 400 million tonnes per annum by 2030 by including key features in the auction process, including offering ease in participation with no restriction for prior coal mining experience, introducing the National Coal Index, optimized payment structures, full flexibility in coal utilisation, efficiency promotion through incentives for early production, and use of clean coal technology. A coal expert said, “With increased focus on the coal industry by the government, reaching 1.4 billion tonnes of coal production could be a possibility.”
Taking a clue, coal production of captive mines went up to 89.57 MT with an increase of 29.47 percent. In 2020-21, the production was only 69.18 MT. According to an official of a captive mine, “In the next year, the production of captive mines is expected to be 135 million tonnes which is an increase of around 50 percent, with the current trend of production, the private production may easily reach its target.”
However, the government has also put a cap on auctioning coal mines with forest cover above 40% considering environmental concerns. A coal analyst said, “As a result, many coal mines in Northern Chhattisgarh were not auctioned. It will reduce a few potential mines in the pipeline though. At least 15 to 20 potential coal blocks will fall in that category, most in Chattisgarh, but the cap on mines will not impact the expected production rate of 400 million tonnes through private mines, if all goes well.”
The upward trend in coal production is apparent, according to data, Coal India Ltd (CIL) production went up by 4.43% from 596.24MT in 2020-21 to 622.64 MT during the financial year 2021-22. Singareni Collieries Company Ltd (SCCL) which comes under the ownership of the government of Telangana saw an increase of 28.55% growth and produced 65.02 MT during 2021-22 compared to 50.58 MT the previous year. But the path to reach 1.4 billion tonnes also has a difficulty. An official in a coal industry said, “Acquisition of land is the biggest bottleneck.” The draft Economic Survey 2021-22 has projected coal demand in the range of 1.3-1.5 billion tonnes by 2030, an increase of 63% from the current demand. The current demand as of 2020 is 955 million tonnes.