India has crossed the coal production target of 1 billion tonnes (BT) for the first time ever in the fiscal year gone by, according to a written reply by Coal and Mines Minister G Kishan Reddy in the Rajya Sabha on July 28, and a target of 1 BT by FY27 from Coal India alone has now been prepared.
This production target will be raised to 1.13 BT by FY30, the minister said. During FY25, Coal India had produced 781.07 MT of coal, clocking a growth of 0.94%.
The ramp up has resulted in India meeting most of its coal requirement through indigenous production, and while the nation still imports coal, it mainly consists of essential items like coking coal and higher grade non-coking coal, for which domestic production is limited either due to scarce reserves or its unavailability.
The minister said, going forward, to reduce dependence on import and meet domestic requirement through indigenous sources, India's total coal production target for FY30 is being projected to be 1.5 BT. This, the minister said, will lead to a reduction in non-essential import. This production target turns out to be an annual growth rate of 6-7% in the next few coming years.
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Some of the initiatives undertaken to ramp up domestic production include Single Window Clearance, amendment regulation to allow captive mines to sell up to 50% of annual production after meeting end use requirement, technological improvement, expansion of existing projects, and auction of coal blocks for commercial mining.
India has already allowed 100% Foreign Direct Investment for commercial mining.
The Coal Ministry has taken steps to expedite development of coal blocks. In addition to that, captive mines owners are now allowed to sell up to 50% of their annual production in the open market after meeting end use requirement for the plant linked with the mine.
Aside of that, auction of commercial mining on revenue sharing basis had been launched in 2020. Under this scheme, a rebate of 50% has been allowed for coal produced earlier than scheduled date of production. The Centre also offers incentives on coal gasification or liquefication.
The terms of commercial coal mining have been liberalised, with no restriction on utilization, among several other liberal parameters to encourage operationalizing of coal mines. In addition, Coal India has adopted several measures to increase coal production.
To boost coal import substitution, Centre has raised the Annual Contract Quantity (ACQ) of gas, or the maximum quantity that can delivered for transportation for any given year.
The government has also launched a Coking Coal Mission to enhance coking coal supply to Steel sector, in an effort to reduce import, while taking steps to step up domestic production. The tenure of coking coal linkages has also been revised for up to 30 years, with an intended aim of coal imports substitution, the minister said.
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