Coal production in India has seen a significant rise from FY10 to FY16, and the total domestic output is now at 626 million tonnes, of which 90 percent comes from public sector coal producers while the private sector contributes 10 percent, says the report.
India, the third largest coal producer in the world after China and the US, is expected to reach a production level of 1.5 billion tonnes by FY20, finds a PWC report.
India has witnessed a two-fold increase in its total raw coal consumption in the last 10 years. Coal is majorly consumed for electricity generation in India (about 64 percent), followed by steel (8 percent) and cement (5 percent) sectors.
Coal production in India has seen a significant rise from FY10 to FY16, and the total domestic output is now at 626 million tonnes, of which 90 percent comes from public sector coal producers while the private sector contributes 10 percent.
Import of coal has also seen a substantial increase at a rate of around 25 percent annually from 2011 till 2016, says the report.
In 2015, India imported a total of 212 MT of coal against only 193 MT in FY16, which is equivalent to one-fourth of the domestic coal consumption.
Economic and infrastructural growth have led to a rise in coal demand. Together with the high import bill of the country, domestic production assumes a very important role as it helps to cut down dependence on imports in the coming years -- especially non-coking coal which accounts for 80 percent of total coal imports, reports PWC.
To achieve a production level of 1.5 billion tonnes (BT) by FY20, the Ministry of Coal has set a target of increasing coal production of Coal India (CIL) to a level of 1 BT by FY20, while the balance production is to be met by the Singareni Collieries Company Limited (SCCL), the private sector, state sector and PSUs.
The government also launched the ‘Power for All’ campaign in April 2015, under which it planned to provide affordable power to all houses by 2019.
CIL, India's largest coal producer in the world with production of around 536 MT in FY16, has developed a roadmap in 2015 for meeting the challenge of achieving 1 BT of coal by FY20. It encompasses a list of planned projects (535 mines) which added up to 908 MT.
SCCL, which is the second major coal producer in India, is required to produce 100 MT of coal by FY20 in order to meet the shortfall, if any. In FY16, SCCL produced 60 MT of coal, while it has set a target of 10 percent growth rate this year and reach an annual production of 66 MT.
Amidst all this, the government, however, has bought out more time before it can auction coal mines for captive and commercial use to private companies.
"Right now markets do not justify an auction of coal blocks. The last round of auction has not seen many takers," said coal secretary Anil Swarup, adding, "I don't see auction of coal blocks in the near future -- at least in the next two to three months."
(Source: PWC report)
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First Published on Jun 23, 2016 04:12 pm