47 coal blocks get mine opening permission, likely to increase to 60 blocks in FY23: Coal Ministry

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After giving permission to 47 coal blocks for mine opening, the government now aims to scale it up to a total 60 coal blocks in 2022-23 out of the total 106 blocks that have been allocated to different entities for captive use, the ministry of coal said on April 12.

Thermal coal still fuels around 75 percent of India’s power generation. As the domestic coal supply has not been able to catch up with the growing demand and international coal prices continue to soar, the government has been prioritising supplies to the power sector and has asked the captive coal mine owners, especially from non-power sectors, to increase their output for their own consumption.

The Ministry of Coal said that its Nominated Authority has reviewed the production of coal with allocatees of captive coal blocks whose coal blocks have either commenced production or are likely to commence production during the financial year 2022-23 and found that coal production from captive coal blocks during 2021-22 was 85 million ton (MT), an increase of around 35 percent on year.

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“The enhanced coal production helped in shortening the demand-supply gap in the domestic market,” the ministry said.

Once the number of coal blocks that have permission for opening increases to 60 in 2022-23, the annual peak rated capacity of operational coal blocks will be around 230 MT and coal production will be enhanced substantially to more than 140 MT, the ministry said.

“These measures will lead to substantial reduction in import of thermal coal and considerable foreign exchange will be saved,” the ministry said.

The ministry of coal has undertaken initiatives to increase the production of coal from captive mines like various amendments in laws and rules liberalising the coal sector, regular review meetings with project proponents and state governments for operationalization of coal mines, appointment of a project management unit for facilitating in obtaining various statutory clearances leading up to starting of coal mines. The ministry said that these initiatives have started yielding results now.

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The ministry quoted Anil Kumar Jain, secretary, ministry of coal, as saying that the coal block allocations have a golden opportunity for increasing coal production as the price of imported coal is very high at the moment and demand of thermal coal will increase due to increase in electricity demand of the country. “Fifty percent sale of coal has been allowed for captive coal blocks and coal production will not be hampered even in cases where end -use-plants are not operational. New coal blocks are being allocated for commercial mining and prospective bidders have shown encouraging responses for these blocks. Some of these blocks have started coal production within one year of allocation,” the statement said.

States across India are staring at coal shortage amid rising temperature and higher demand from industrial users. While states like Andhra Pradesh, Punjab, Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand, Haryana, Rajasthan, and Telangana have reportedly resorted to temporary power outages, industry-heavy states like Maharashtra and Gujarat are facing challenges to avoid disruptions.

State-run Coal India, which accounts for over 80 percent of the domestic output in India, produced 622.6 MT of coal in 2021-22, missing its target for the year and aggravating concerns over coal shortage.

In a separate statement on April 12, Coal India said that it scaled up its capex to Rs14,834 crores ending in FY22, its highest so far.