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Meeting India’s coal production targets

Published by
World Coal,

According to the US Energy Information Administration (EIA), India’s coal consumption is surpassing its domestic production – particularly in the electric power sector. Coal-fired electric power capacity increased by approximately 9.4% per year during 2005 to 2012 whereas coal production only grew by 4.7% per year, producing approximately 600 million t of coal. In order to meet demand and support increasing coal-fired generation, the Indian government has set a coal production target of 1.5 billion t by 2020. The IEA looked at ways to meet this:

Overcoming preproduction obstacles

Forest clearances, environmental permits and land acquisition challenges are difficulties hindering the progress of India’s coal industry. There are plans in place to help facilitate overcoming these problems. According to the EIA, in 2012, drafts of a replacement for the government’s dropped forestry policy that had blocked 660 million t of potential coal production indicate a forest policy that could be more beneficial for mining. Additionally, the Ministry of Coal is tracking mine projects in the preproduction stage to monitor the speed of permit processing and environmental clearances, and it may intervene if there are significant delays. If passed, the Land Acquisition Reform Act pending in India's Parliament could make it easier to acquire land for coal mining activity.

Increasing Coal India Ltd production

One way to help boost coal production is indicated to be increasing coal production from India’s national coal producer, Coal India Ltd (CIL). The company first planned to produce 1 billion t of coal by FY2020, which is nearly double the amount it produced in FY2015. This has been revised to about 900 million t. Annual production therefore must still increase faster than its current rate to meet its new target.

Private and foreign participation

Meeting coal production in India could be aided by encouraging greater private and foreign participation. According to the EIA, in August 2014, allegations of impropriety, hoarding of coal resources, lost government revenue, and a lack of transparency led India's Supreme Court to cancel 214 coal licenses allocated to the private and public sector, representing 9% of FY2013's production. The Ministry of Coal reauctioned several of these properties to help reduce the disruption from the cancellation, yet the extent of the impact of this redistribution of coal properties on production is uncertain.

Private mining may be expanded further as a result of the Coal Mines Special Provision Bill passed in March. This law enables commercial coal mining by both private companies and foreign companies having an Indian subsidiary. The government is currently evaluating the effect of a coal block auction to allocate properties for commercial development.

Expanding coal transportation

The EIA also indicated focusing attention on coal transportation expansion would help meet the coal production target. Rail transportation has been limited and this has hindered production and distribution. The EIA reported, in 2014, 50 million t of coal was stranded at mines because of rail limitations. The 93-kilometer Tori-Shivpur-Kathautia line to connect coal mines in Jharkhand in eastern India, which began in 1999 and scheduled to be completed in 2005, is still only halfway done. Recently, the government is concentrating on three key rail projects that together could facilitate an additional 100 million t of coal production. The first is the Jharsuguda-Barpali railway link scheduled to be completed in 2017 in Odisha, south of Jharkhand.

Edited from sourece: the US EIA by Harleigh Hobbs

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