Daily coal supplies to the power sector have risen 36% from their post-monsoon lows in September and are averaging about 9% higher in October than in the preceding month, the government said on Friday, signalling an improvement in fuel availability for power generation.

Rail-based supplies have also been strengthened, with an average of 465 rakes dispatched daily in October, the government said, adding that road-based supplies had improved as well.

Last month, state-owned Coal India and its subsidiaries offered power plants with existing supply agreements the option to lift additional coal beyond their annual contracted quantities through road transport, supplementing their regular rail-based supplies.

The Coal Ministry expects daily rail loading of 465–475 rakes to be sufficient to meet power demand, which is expected to moderate by mid-October in line with historical trends.

“With the monsoon receding and peak demand expected to moderate by mid-October (as per historical trends) sustained loading of 465–475 rakes per day should support further stabilisation and enable stock rebuilding ahead of the festive, winter and subsequent summer demand periods, thereby reducing the number of plants in the critical category,” it stated.

The ministry also said the depletion of coal stocks — the difference between consumption and incoming supplies — had slowed sharply, from 0.243 million tonnes (MT) a day in September to 0.116 MT in October.

“The position is therefore stabilising, although stock rebuilding is yet to commence,” it added.

The ministry’s statement came in response to reports flagging concerns over low coal inventories at power plants.

Clarifying the significance of plants classified under the ‘critical stock’ category, it said the criterion — which identifies plants holding less than the prescribed threshold of normative coal stocks — was primarily intended as an early-warning mechanism to flag potential shortages.

“A plant appearing on this list is, by design, an early-warning entry and not an indication that it has run out of coal or is at imminent risk of shutting down,” it argued.

Coal India’s production rose 9.2% year-on-year to 53.5 million tonnes (MT) in September, while supplies grew 12.5% to 61.2 MT.

Supplies to the power sector, its largest consumer, increased 10.6% to 48.9 MT. Supplies to the non-regulated sector rose 19.4%.

The state-owned miner said sustained operational momentum has strengthened its confidence in meeting its FY27 production target of 815 MT and supply target of 850 MT.

With the monsoon over, coal production and supplies are expected to pick up, it said.

Coal production at mines operated by state-owned Coal India Ltd is gaining momentum as intense monsoon rains ease across coal-bearing regions, the Union Coal Ministry said on Saturday.

Average daily production rose to around 1.7 million tonnes (MT) on September 4, against approximately 1.36 MT a day during the first three rain-affected days of the month, according to the ministry.

The improvement comes as declining rainfall allows mining operations and coal handling to normalise.

“Coal beds that had turned sticky and wet following prolonged exposure to rain are now drying, making freshly mined coal more free-flowing and easier to transfer, handle and dispatch through Coal Handling Plants (CHPs),” it said.

The ministry further stated that overburden removal—a key indicator of exposure in a coal bed, involving the removal of layers of soil, rock and other material to access the coal—also increased to 4.1 million cubic metres on September 4, compared with 2.5 million cubic metres recorded during the first three days of the month.

Kolkata-headquartered miner and its subsidiaries have also offered power plants with existing supply agreements the option to lift additional coal beyond their annual contracted quantities through road transport, alongside existing rail-based supplies, the ministry said.

“With dry spells setting in, loading is expected to pick up further over the coming days. Close monitoring is being maintained to sustain this trend,” the ministry said.

Coal availability for the power sector has also strengthened. Average daily dispatch to power plants increased to 1.5 MT on September 4, from around 1.35 MT a day during the first three days of September, the ministry said.

The government also highlighted Coal India’s sizeable inventory position as a cushion against supply disruptions. The miner currently has around 76 MT of coal stocked at its pitheads, including 46 MT of coal ready for extraction, it said.

The quality of domestically produced coal with high-ash content remains a “major challenge”, the parliamentary Standing Committee on Coal, Mines and Steel stated in their latest report, calling for increased priority to coal beneficiation and modernisation of washery infrastructure for increasing availability of higher-quality coal.

Coal production from captive, commercial mines up 10.2% in FY 2025-26

The committee observed there was a variance in the capacity of coking coal washeries and their output owing to aged infrastructure, legacy technology, delayed supply of raw coal from mine pitheads and certain incompatible design of washeries with the raw coal supplied.

In its report, the committee added, “The committee are also apprised that many washeries of Coal India have already outlived their designed operational life and are facing challenges due to legacy technology.”

It pointed to Coal India producing 3.59 MT of washed coking coal whilst they hold a capacity of 18.35 MT per annum.

For context, high-ash-content coal is not suitable to be used independently in steel production and therefore must be washed and blended with higher-grade low ash coal.

The dynamics also results in the country’s reliance on imported coking coal.

Among other things, the committee called for “timely modernisation of the ageing washeries” and “removal of logistical constraints” to impart maximum utilisation of existing coal assets and enhance availability of washed coal.

Specifically, on logistical constraints, the committee called for the ministry to institute washeries “at or near pitheads”. It also suggested that development of washeries in the future align suitably with mine expansion plans and first-mile connectivity infrastructure.

“The Committee also note that pithead beneficiation enables removal of ash and impurities closer to the source of production, thereby improving transportation efficiency, lowering emissions associated with coal movement and enhancing the overall economics of coal utilisation,” it stated in the report.

State-owned miner Coal India’s net profit in the June-end quarter stayed nearly flat year-on-year (YoY) as cost of explosives and industrial diesel, among other essentials required for mining, cumulatively rose double-digit amid the West Asia conflict, even as it sought to absorb the impact of the elevated pricing.

Kolkata-headquartered Coal India’s net profit stood at ₹8,850 crore at the end of June quarter, which increased by a marginal 0.7% on a yearly basis. The miner declared an interim dividend of ₹5.50 per equity share.

The mining behemoth’s expenses during the quarter rose 27% YoY to ₹3,260 crore. It showed an incremental cost of ₹244 crore in explosives during the review quarter, ₹435 crore in oil and lubricant expenses, and ₹19 crore in machinery and timber expenses.

The miner’s revenue increased 8% YoY to ₹46,255 crore.

In a presentation, the company said it produced 169.63 million tonnes (MT) of coal during the quarter against 183.32 MT in the year-ago period. The coal offtake rose to 197.86 MT from 190.96 MT a year earlier.

It is the main fuel supplier to the country’s power sector, providing the bulk of coal required by thermal power plants. Its role is central to energy security, especially as coal still accounts for roughly 70% of India’s power generation.

State-owned Coal India informed on Friday (June 5, 2026) that it would be putting on offer 35 million tonnes (MTs) of high gross-calorific value (GCV) under the linkage auction window to be held June 12.

The miner underlined the objective was to reduce the import of the high-GCV coal which is primarily consumed by the sponge iron sector.

Sponge iron manufacturing is by their very nature capital-intensive and volatility in prices of the imported coal and their freight – against the broader geopolitical backdrop – particularly have the potential to affect manufacturer margins.

The Kolkata-headquartered miner also stated that it has allowed steel (coking) sub-sectors to sell coal middling, which are power-grade coal and acquired as residual byproducts of washed raw coking coal – in a move that would further address the import dependency.

In the current tranche of auction, Coal India has offered 13.75 MT of coal to the steel sub-sector.

Along with this, it has allowed participants to change consortium partners over the duration of the linkage period up to five times – seeking to allow more flexibility adhering to their requirements.

Consumers of the non-regulated sectors – seeking to establish a greenfield or brownfield project – are allowed to secure coal linkages even as their projects are yet to be commissioned.

Catering to power sector requirements

Other than non-regulated sectors, Coal India also informed that it would be conducting the next round of short-term auction under the SHAKTI policy, that is, the policy framework for domestic coal linkages to the power sector, on June 8.

Around 34 MT of coal would be put up on the block.

Seeking to improve the quality of their coking coal, state-owned miner Coal India informed it would be setting up eight new coking coal washeries, with a combined washing capacity of 21.5 million tonnes a year, at an estimated capital outlay of ₹3,300 crores.

Of the eight washeries, five would be set up by the Jharkhand-headquartered Central Coalfields Ltd. They would have a cumulative capacity of 14.5 million tonnes a year. The remainder would be with Bharat Coking Coal Ltd. They would account for a cumulative capacity of 7 million tonnes a year.

Coal India expects to make the eight washeries operational by FY30.

Additionally, the Kolkata-headquartered miner would also be spending ₹300 crore in renovation and modernisation of its existing coking coal washeries. At present, CIL operates 10 such washeries that account for a cumulative capacity of 18.35 million tonnes a year.

“This calibrated expansion of washing capacity and modernisation is to improve domestic coking coal quality and also is an effort to moderate import dependence in the coming years,” the miner stated.

Essential to note, India has an estimated 37.37 billion tonnes of coking coal resources, largely located in Jharkhand, with additional reserves in Madhya Pradesh, West Bengal and Chhattisgarh. Notwithstanding the domestic availability, approximately 95% of coking coal requirements of the domestic steel sector is met through imports.

In fact, the union government had notified coking coal as a strategic and critical mineral in January this year.

“Though India is well endowed with coal reserves, inherently, domestic coking coal resources are scarce. Compounding this, the ash content ranges from 25% to 45% much higher than other countries globally, making the import necessary,” Coal India observed.

Domestic coal production in December accelerated about 3.6% on a year-over-year (YoY) basis, also exceeding the target for the month, as monsoon-related disruptions subsided. Although, according to provisional government data for the month, on a financial year (FY)-to-date basis until December-end, coal production slipped marginally as prolonged monsoons in the previous year marred production.

India produced 101.45 million tonnes (MT) of coal in December, 3.6% higher than 97.94 MT it produced in the comparable period a year ago. This is inclusive of production from state-run Coal India and their subsidiaries, Singareni Collieries Company Ltd (SCCL) and from captive mines and others. The production target for the month was 87.06 MT.

Until December in the ongoing financial year, India produced 721.65 MT of coal, 0.64% lower than the comparable period last year.

Overall coal despatch in December also decelerated 2.64% from the comparable period last year. This is primarily led by an approximately 7% decline in offtake to the power sector during the reported period.

Although it’s important to note, power generated from the conventional fossil resources expanded 4.42%. It accounted for about 74% for the power generated during the month. Power demand in December traditionally records an uptick as the country heads into peak winters spurring use of heating appliances.

Analysts attribute this paradigm to sufficiency in coal stocks. According to Niladri N. Bhattacharjee, Partner and Leader for Metals and Mining at Grant Thornton Bharat, coal stocks have increased throughout the system, that is, power plant coal yards and mine pitheads, between March 31st and December 31st last year. “With increased coal production from captive and commercial coal mines, the coal inventory situation in the country is comfortable. As such, it is therefore difficult to correlate thermal power generation with coal-offtake,” he told The Hindu.

To improve governance and accountability, the Prime Minister’s Office (PMO) has directed the coal ministry to map and list all the subsidiaries of state-run CIL by 2030, sources said.

The move aims to streamline governance, enhance transparency and unlock value through asset monetisation in the coal Public Sector Undertaking (PSU). Coal India Limited (CIL) accounts for over 80% of domestic coal output.

There are plans to list all of Coal India’s subsidiaries by 2030, highly placed sources said on the condition of anonymity.

There is an instruction from PMO to list all the arms of Coal India by 2030 to improve the company’s governance, sources said.

CIL operates through eight subsidiaries, namely Eastern Coalfields Limited, Bharat Coking Coal Limited, Central Coalfields Limited, Western Coalfields Limited, South Eastern Coalfields Limited, Northern Coalfields Limited, Mahanadi Coalfields Limited and Central Mine Planning and Design Institute Limited.

BCCL and Central Mine Planning & Design Institute Limited are set to be listed on stock exchanges by March 2026, with all preparations completed, sources said.

The domestic and international roadshows of BCCL are completed, they added.

The listing process for Bharat Coking Coal Limited is in full steam with absolutely no holds or delays, sources explained.

In a regulatory filing to the exchanges recently, Coal India said its board of directors had given the go-ahead for South Eastern Coalfields Limited and Mahanadi Coalfields to be listed.

The decision follows a specific directive from the Ministry of Coal to CIL to initiate concrete steps to ensure the listing of two of its primary subsidiaries, Mahanadi Coalfields Limited and SECL, within the next financial year.

Bharat Coking Coal Limited, a few months back, filed its draft red herring prospectus (DRHP) with capital market regulator SEBI for its proposed initial public offering.

In a regulatory filing, CIL had said the DRHP, pertains to an offer for sale (OFS) of up to 46.57 crore equity shares by Coal India. The IPO remains subject to receipt of necessary approvals, market conditions, and other considerations, it had added.

Central Mine Planning and Design Institute Limited had also filed its DRHP with SEBI for its proposed IPO via the offer-for-sale route.

Coal India Limited is targeting a production of 875 million tonnes for the current financial year.