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.

Seeking wider stakeholder participation with the Government, Union Coal Minister G. Kishan Reddy said it is high time that coal production in India is increased.

Launching the 13th round of auctions of commercial coal mines, the Union Minister sought that prospective bidders look to commence production at their blocks ahead of schedule. Mr. Reddy further urged the need for diversification and sought they invest generously in the realm.

Earlier in his address, the Union Minister had emphasised that power demand would increase in the future. He underlined this was the basis of the government’s objective to increase the number of coal blocks being put to auction, expedite clearances and address hurdles for commencing production.

No coal shortage in the country

Mr. Reddy said the entire demand for coal for thermal power projects, cement industries and steel industries, among others, was being fulfilled adequately. “Imports too have gone down 9% on a year-over-year basis, which has resulted in savings of ₹65,000 crores in foreign exchange,” he stated.

Furthermore, the Union Minister said India has adequate coal reserves and has not employed 10% of its overall reserves as of now.

Fourteen blocks put for auction in Round 13

The Ministry informed that 14 coal mines are being put to auction in the latest round. This consists of 4 mines being offered under the Coal Mines (Special Provisions) Act, 2015 and 10 under the Mines and Minerals (Development) Act, 1957. Three mines from the 12th round are also being auctioned.

Of the total mines, ten are fully explored and ready for immediate development, whilst four are partially explored.

The mines are spread across Jharkhand, Chhattisgarh, Odisha, Andhra Pradesh and Madhya Pradesh.

Since the inception of the mining framework in 2020, more than 134 mines have been auctioned across the twelve rounds, attracting investments worth ₹41,600 crore and generating over 3.5 lakh jobs, the Ministry informed.