India’s Coal Sector: A Path to Self-Reliance
The Indian coal sector is undergoing significant transformation, focusing on reducing imports and enhancing domestic production. Union Minister of Coal and Mines, Shri G Kishan Reddy, emphasized this commitment during a recent press conference in New Delhi. He highlighted the Ministry’s efforts to achieve ‘Atmanirbharta’ or self-reliance in coal production. The coal sector is crucial for India’s energy security, contributing to 55% of the national energy mix. With the fifth-largest geological coal reserves globally, India is the second-largest consumer of coal. This article explores the key initiatives and progress made by the Ministry of Coal to strengthen the sector.
Reducing Imports and Strengthening Domestic Production
The Ministry of Coal has made substantial strides in reducing reliance on imported coal. From April to November 2024, coal imports decreased by 5.35%, resulting in savings of approximately $3.91 billion (₹30,007.26 crore). This decline is particularly notable in the blending of coal for domestic power plants, which fell by 23.56%. The Ministry’s ‘Mission Coking Coal’ aims to boost domestic coking coal production to 140 million tonnes (MT) by the fiscal year 2029-30. This initiative is crucial for decreasing dependency on imports in the steel sector, which heavily relies on coking coal for production.
The focus on domestic production not only enhances energy security but also supports local economies. By increasing the availability of coking coal, the Ministry aims to create a more self-sufficient steel industry. This shift is expected to have a ripple effect on various sectors, promoting job creation and economic growth. The commitment to reducing imports aligns with the broader goal of achieving energy independence, ensuring that India can meet its energy needs without relying heavily on foreign sources.
Record-Breaking Production and Policy Reforms
India’s coal production has reached unprecedented levels, hitting an all-time high of 997.82 million tonnes (MT) in the fiscal year 2023-24. This marks a significant increase from 609.18 MT in FY 2014-15, reflecting a Compound Annual Growth Rate (CAGR) of 5.64% over the past decade. The production surge of 11.71% in FY 2023-24 compared to the previous year underscores the effectiveness of the Ministry’s initiatives.
A landmark policy reform introduced in 2020 allowed for commercial coal mine auctions, encouraging private sector participation and the adoption of modern technologies. As of January 2025, the Ministry has allotted 184 mines, with 65 blocks receiving Mine Opening Permissions. The total production from these blocks has reached 136.59 MT, showing a remarkable 34.20% year-on-year increase. This trend is expected to continue, with projections indicating that production could exceed 170 MT in FY 2024-25. These reforms not only enhance production capacity but also foster a competitive environment that drives innovation and efficiency in the coal sector.
Strengthening Coal Supply Chains
To ensure a consistent and reliable coal supply, the Ministry of Coal has established robust institutional mechanisms. An Inter-Ministerial Committee has been formed to facilitate coordination between various stakeholders, including the Railways and power sector representatives. As a result, coal stock at Thermal Power Plants (TPPs) currently stands at 49 MT, sufficient for nearly 21 days, even during logistical challenges such as the Maha Kumbh period.
The Ministry has also launched the First Mile Connectivity (FMC) initiative, which has commissioned 39 projects with a total capacity of 386 million tonnes per annum (MTPA). This initiative aims to enhance the efficiency of coal transportation and distribution. Additionally, the Rail-Sea-Rail (RSR) mode has successfully doubled coal movement from 28 MT in FY 2022 to 54 MT in FY 2024. These efforts are vital for maintaining a steady supply of coal, ensuring that power generation remains uninterrupted and that industries dependent on coal can operate smoothly.
Sustainability and Technological Advancements
The coal sector is increasingly focusing on sustainability and environmental responsibility. Large-scale afforestation efforts have been initiated, with over 54.06 lakh saplings planted across 2,372 hectares in 2024. The ‘Ek Ped Maa Ke Naam’ campaign has successfully planted over 1 million saplings at 332 locations in 11 states. Additionally, 4,695 hectares of land have been earmarked for Accredited Compensatory Afforestation, demonstrating a commitment to restoring ecological balance.
Technological advancements are also a priority for the Ministry. Coal gasification is emerging as a key strategy for enhancing energy security, with a target of 100 MT by 2030. The government has approved an ₹8,500 crore incentive scheme to support coal gasification projects across both public and private sectors. Furthermore, the introduction of the National Coal Mine Safety Report Portal and the Mine Closure Portal ensures responsible and transparent mining practices. The Ministry is also exploring the establishment of a Coal Trading Exchange to foster a competitive and transparent market, further modernizing the coal sector.
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