For faster coal transportation, ministry take up 68 First Mile Connectivity projects

Coal India: Coal India's production in September increases 12.3% to 45.7 million tonnes. The company said its coal production in September 2022 increased by 12.3% to 45.7 million tonnes, and offtake rose by 1.1% to 48.9 million tonnes compared to same period last month. These are provisional numbers.

The Coal Ministry has intensified its plan to make evacuation and transportation of coal more efficient by taking up 68 First Mile Connectivity (FMC) projects, under the government’s national coal logistics plan. Of these, the 17 new sites that will be executed by Coal India Limited (CIL), were finalised on October 20.

The Coal Ministry said in a statement: “The development of cost-efficient, fast and environment-friendly coal transportation is an important goal of the country. Keeping in view the increased coal evacuation in the future, the ministry is working on the development of a National Coal Logistics Plan including First Mile Connectivity through railway sidings near coal mines and strengthening of the rail network in coalfields.”

It added: “To replace imported coal with domestically mined coal, the Ministry of Coal has set a target to produce 1.3 billion tonne (BT) in FY 2025 and 1.5 BT by FY 2030.”

The ministry has undertaken 51 FMC projects of 522 million tonne per annum (MTPA) capacity at a cost Rs 18,000 crores. Of these, 44 have been taken up by the CIL, four by Singareni Collieries Company Limited (SCCL), and three by NLC India Limited (NLCIL). Further, of the 51 projects, eight (6-CIL and 2-SCCL) projects with a capacity of 95.5 MTPA have been commissioned already. The rest are expected to be commissioned by FY 2025.

After CIL took up the new projects, it was suggested to take up another 17 FMC projects with a capacity of 317 MT at a cost of Rs 11,000 crore, to be implemented during FY 2027.

Commenting on this, a senior CIL official said: “We have expanded the scope of loading through FMC projects. Now, every coal project having a production capacity of 1 MTPA and more would move coal through FMC mode. This is subject to techno-economic viability and the 17 projects have been identified under this criterion.”

Under phase-I, only those projects having 4 MTPA output capacity were included for FMC mode evacuation.

The CIL is presently supplementing FMC projects by dovetailing 12 rail connectivity projects with them at an estimated cost of Rs 1,700 crores. The plan is to commission rail connectivity by FY 2027 when Phase III projects are expected to turn operational.

The CIL official said: “Including the existing 151 MT FMC evacuation capacity, all projects under three phases are aimed at transporting 940 MTs of coal through an environment-friendly transportation system. The loading capacity of 35 Phase I FMC projects and that of nine Phase II projects is 415 MTs and 57 MTs, respectively. Carbon footprint suppression would be sizeable when FMC projects are implemented at full capacity.”

Notably, at least 24 rail connectivity links have already been identified for 35 Phase-I FMC projects at a CAPEX of Rs 3,660 crores. Of these, four are already commissioned and 20 are under construction.

These measures were necessitated by the growing energy demand in India. In March-April this year, India faced a coal crisis that was aggravated by the steep rise in power demand due to a heatwave that had gripped the country. A worse crisis occurred in October 2021, resulting in power cuts across several parts of India.

As per coal and power ministry officials, the government took major learning from these crises and realised that the time taken for coal transportation ought to be reduced. The draft national coal logistic plan pointed out that at present, oversized coal is leading to higher wagon turnaround, which is not just adding to freight costs but also exacerbating the coal supply crisis.