India: Increase in Domestic Coal Production

Most of the requirement of coal in the country is met through indigenous production / supply. The focus of the Government is on increasing the domestic production of coal and to eliminate non-essential import of coal in the country. In the year 2022-23, coal production increased by 14.77% over the previous year. During the current year till June’ 2023, domestic coal production has increased over 8.51% compared to the same period of last year. The steps taken by the Government to make the country self-sufficient in the production of coal are as under:

Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 for enabling captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market after meeting the requirement of the end use plant linked with the mine in such manner as may be prescribed by the Central Government on payment of such additional amount.

  • 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.
  • Auction of commercial mining on revenue sharing basis launched in 2020. Under commercial mining scheme, rebate of 50 % on final offer would be allowed for the quantity of coal produced earlier than scheduled date of production. Also, incentives on coal gasification or liquefaction (rebate of 50 % on final offer) have been granted.
  • Coal India Limited is adopting Mass Production Technologies (MPT) in its Underground (UG) mines, mainly Continuous Miners (CMs), wherever feasible. Coal India Limited has also envisaged working large numbers of Highwalls (HW) mines in view of the availability of Abandoned / Discontinued mines. Coal India Limited is also planning large capacity UG mines wherever feasible.
  • In its Opencast (OC) mines, Coal India Limited already has State-of-the-Art technology in its high capacity Excavators, Dumpers and Surface Miners. Digitization is being tried on pilot scale in 7 of its mega mines and shall be replicated further.
  • SCCL has planned to produce 75 MT by 2023-24 from the present level of 67 MT. Regular liasioning is being undertaken for grounding of new projects. In addition, progress of activities of new projects and operations of existing projects is being regularly monitored.

Measures taken by the Government to substitute coal imports and increase domestic coal supplies are as under:

  • The ACQ has been increased up to 100% of the normative requirement, in the cases where the ACQ was either reduced to 90% of normative requirement (non-coastal) or where the ACQ was reduced to 70% of normative requirement (coastal power plants). Increase in the ACQ would result in more domestic coal supplies, thereby, reducing the import dependency.
  • Under the provisions of Para B (viii) (a) of SHAKTI Policy, coal linkage is provided for short term for sale of power generated through that linkage in Day Ahead Market (DAM) through Power Exchanges or in short term through a transparent bidding process through DEEP portal. In addition, with the amendment to the NRS linkage auction policy introduced in 2020, the tenure of coking coal linkages in the NRS linkage auction has been revised for a period upto 30 years. The coal offered for short term to the Power Plants under the amended provisions of SHAKTI Policy as well as increase in the tenure of the coking coal linkages in the Non-Regulated Sector linkage auction for a period upto 30 years is expected to have a positive impact towards coal imports substitution.
  • Government has decided in 2022 that the coal to meet the full PPA requirement of all the existing linkage holders of Power Sector shall be made available by the coal companies irrespective of the trigger level and Annual Contracted Quantity levels. The decision of the Government of meeting the full PPA requirement of the linkage holders of the Power Sector shall reduce the dependence on the imports.
  • An Inter – Ministerial Committee (IMC) has been constituted in the Ministry of Coal on 29.05.2020 for the purpose of coal import substitution. The Representatives from Ministry of Power, Ministry of Railways, Ministry of Shipping, Ministry of Commerce, Ministry of Steel, Ministry of Mines, Ministry of Micro, Small & Medium Enterprises (MSME), Department for Promotion of Industry & Internal Trade (DPIIT), Central Electricity Authority (CEA), Coal Companies and Ports aremembers of this IMC. Nine meetings of the IMC have been held so far. On the directions of the IMC, an Import Data System has been developed by Ministry of Coal to enable the Ministry to track the imports of coal. Efforts are taken to ensure more domestic supplies of coal.