Govt plans to increase coal production

Coal demand in India is expected to grow from 649 mt a year now to 730 mt a year in 2016-17

GN Bureau | October 22, 2013



India plans to mine an additional 240 million tonnes per annum (mtpa) of coal from 26 new fields in the five years to March 2022. The plan is yet to be finalised and will be presented to the prime minister Manmohan Singh, according to a news report published in the Mint. The ministries of power and coal and the Planning Commission are involved in drafting the plan that will be implemented by state-owned Coal India Limited (CIL).

According to the government official the coal requirement is estimated to be around 850 mtpa by the end of the 13th plan (2017-22), but the availability is limited. The power projects, most of which are fuelled by coal, have been hit hard by the shortage of the fuel.

Coal demand in India is expected to grow from 649 mt a year now to 730 mt a year in 2016-17, with the projected local availability being only 550 mt per year. According to the analyst the target may not be met in the initial years of the plan because it takes a minimum of around six years for the coal to be mined from the date of allocating a field.

There’s also the problem of laying railway lines to transport the fuel. Indian railways are laying lines to ship coal from mines in Chhattisgarh, Jharkhand and Odisha at a cost of Rs 4,000 crore. The railways moves 52% of the coal mined in the country, a share that’s expected to rise to 58% in 2016-17. The shortage of last-mile rail links has slowed the movement of coal from fields to consumption points such as power generation plants.

India’s bid to boost local production has got bogged down in delayed and more stringent environmental approval processes in the recent past. The process by which mines are allotted has also being questioned after allegations of preferential treatment and corruption, including the period when the prime minister held the coal portfolio.

The new land acquisition law is expected to make it tougher and more expensive to acquire land for mining.

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