The coal ministry expects India’s thermal coal output to rise significantly in the next fiscal year, with production from captive coal mines set to increase from around 45 milion tonne (mt) in the current financial year to 130 mt in 2022-23. This could release some ‘linkage coal’, allowing Coal India (CIL) to tap export markets, coal secretary, AK Jain said.
India hardly exports coal now; CIL’s sales abroad are limited to certain despatches to Bangladesh and Nepal. Speaking at a conference here, he said the prospects of surplus coal production in FY23 look bright despite the fact that electricity demand could grow by 6% in 2022-23.
India at present produces 1,370 billion units (bu) of coal but the production is estimated to go up to 2400-2600 billion units by 2030. The Niti Aayog suggests thermal electricity generation would go up to 2,505 bu by 2030 and the incremental demand would come from non regulated sectors, especially for new demand from electrification of sectors like cooking, transport and technologies like bitcon.
CIL chairman & MD Pramod Agrawal was of the view that India’s share of coal in its total energy basket could be 30% by 2040. But Bhattacharjee opined that the addition in the non-conventional portfolio was being unable to keep pace. “India was supposed to add 175 GW of solar portfolio by 2020 but it added 125 GW capacity,” he said.
Jain said with the growth in power demand, the auction market for both power and coal would grow. “There will be churning in mining activity,” Jain said. Mines commercially unviable for Coal India, would have to go to public sector mining behemoths. “Coal India will not have the luxury to drag on loss making mines and continue to finance inefficient mines,” Jain said.
But a highly placed CIL official assured FE a draft model document has been prepared wherein mines shall be put to auction under the mines development operator (MDO) model and CIL retaining its ownership would allow development of those mines under a revenue sharing model.
Last year CIL had announced closure of 23 unviable mines, that could save the company around `500 crore. The PSU miner has already shut down 82 such mines in the last four years but at the same time is poised to transfer it to private players.. Though closure of underground (UG) mines were on the radar of closure for its heavy cost of operation, from 2020, the ministry altered its policy and have already identified 12 UG mines for restarting operations under the PPP model with improved technology coming into play to mine coal from deeper seams.
“UG mining is the only option for increasing productivity and it is the only road ahead to ensuring fuel security,” Subrata Chakravarty, former CMD, Eastern Coalfields, told FE.