Rising coal production from captive and commercial mines, which is expected to hit 140 million tonnes (MT) in FY24, will help in reducing the price of the critical commodity, Coal Secretary Amrit Lal Meena said.
“With wider contributions from captive and commercial mines, the availability of coal to users will be better… the pressure on Coal India’s (CIL) coal auctions will reduce. Hence, the premium on auction will go down and coal will be cheaper for consumers. This, in turn, will help reduce the cost of production of all coal-based industries,” he told businessline.
Overall production and dispatch from captive and commercial coal mines during April-February in FY24 was 126.80 MT. Output rose to 123 MT in FY23 from 86 MT in FY22. Average daily production in February 2024 was 5.14 lakh tonnes (LT), which is a first.
Coal index
The Coal Secretary said that the rising production of the dry fuel, which accounts for more than 70 per cent of India’s power generation, is also reflected in the National Coal Index (NCI).
NCI is a price index that combines prices from all sales channels — notified prices, auction prices and import prices. It considers the prices of coking and non-coking coal of various grades that are transacted in the regulated (power and fertiliser) and non-regulated sectors.
The index witnessed a fall of 4.75 per cent in December 2023 at 155.44 points, from 163.19 points a year ago, which indicates sufficient availability of coal. In January 2024 the decline was steeper at 9.27 per cent, as the NCI stood at 154.53 points against 170.32 in January 2023.
The NCI had peaked in May 2022 at 246.97 points, but declined in the following months, indicating more availability.
Focus on commercial mines
“The matter of satisfaction for us is that many of the commercial coal mines are starting production much before the stipulated period… getting clearances is faster than (in the case of) captive mines. This is a significant improvement in the overall coal sector. The systems and processes have been streamlined. There is continuous review and monitoring with the stakeholders. State government is fully supportive. The Environment Ministry is also supportive,” Meena said.
Ongoing efforts under the PM Gati Shakti National Master Plan (NMP) are producing results, he said, adding that the pace of production from commercial mines will pick up over the next two years.
The share of captive and commercial mines will gradually increase year-by-year, while the share of government PSUs will reduce, Meena projected.
On the auctions, he said, “After seven rounds of commercial coal mine auctions, a total of 91 mines have been offered. The eighth and ninth round of auctions are underway. In March, we will complete the financial bidding and allot mines to successful bidders. It is expected that another 16 mines will go, taking the total to 105-107. The peak rated capacity (PRC) of these mines will be more than 220 million tonnes per annum (MTPA).”
At present, eight commercial coal mines have commenced production. They are expected to produce over 15 MT in FY24 and around 23 MT in FY25.