New Delhi, February 10, 2025:
Introduction
With the fifth-largest geological coal reserves globally and as the second-largest consumer, coal continues to be an indispensable energy source, contributing to 55% of the national energy mix. Over the past decade, thermal power, predominantly fueled by coal, has consistently accounted for more than 74% of our total power generation. Despite commendable strides in promoting renewable energy sources, the sheer growth in electricity demand necessitates a continued reliance on thermal power, with projections indicating its share to be 55% by 2030 and 27% by 2047. It is anticipated through comprehensive studies that coal demand in 2030 will likely reach 1462 MT and 1755 MT by 2047.
Growth of the Coal Sector in December 2024
As per the Index of Eight Core Industries (ICI), the coal sector registered the highest growth of 5.3% in December 2024, reaching 215.1 points compared to 204.3 points in December 2023. During April-December 2024, the coal industry index increased to 177.6 points from 167.2 points in the previous year, marking a 6.2% growth—the highest among all core industries.
The Combined Index of Eight Core Industries showed an overall growth of 4.0% in December 2024 compared to the previous year. The index for April-December 2024 increased by 4.2% over the same period in FY 2023-24, emphasizing coal’s significant contribution to industrial expansion. Additionally, the coal sector accounts for about 50% of freight revenue for Indian Railways and provides direct employment to nearly 4.78 lakh individuals.
India’s coal production has reached an all-time high of 997.82 million tonnes (MT) in FY 2023-24, marking a significant rise from 609.18 MT in FY 2014-15, with a Compound Annual Growth Rate (CAGR) of 5.64% over the past decade. In FY 2023-24 alone, production has surged by 11.71% compared to the previous year. Coal India Limited (CIL) remains the dominant producer, while SCCL and Others/Captive sources have also shown consistent growth, particularly in the last three years.
State Governments also benefit significantly from coal revenues, with royalty, District Mineral Foundation (DMF) contributions, and State GST collections amounting to ₹31,281.7 crore in the fiscal year 2023-24.
Dispatch of Coal
The cumulative coal dispatch April 2024 to January 2025 has risen to 843.75 MT, marking 5.73% increase from 798.02 MT recorded during the corresponding period of the previous year. Mine opening permissions were granted for three new mines—Bhaskarpara, Utkal E, and Rajhara North (Central and Eastern). The Ministry of Coal remains committed to augmenting domestic production, reducing import dependence, and ensuring energy security for India.
Indian Coal Sector Achieves Significant Import Reduction in FY 2023-24
The Indian coal sector significantly reduced its import dependency in FY 2023-24, with only 110 MT classified as non-substitutable imports, by increasing domestic coal production. Between April and November 2024, coal imports declined by 5.35%, saving approximately $3.91 billion (₹30,007.26 crore). Notably, coal imports for domestic power plant blending fell by 23.56%. Supply from CIL and SCCL, along with captive sources, rose from 734 MT (2018-19) to 1149 MT (2023-24), while demand reached 1273 MT. Additionally, private sector coal production increased from 58 MT to 184 MT, further strengthening India’s energy self-sufficiency.
This decrease in imports and increase in domestic supply is enabled by various efforts of the government. The Ministry’s ‘Mission Coking Coal’ launched in 2022, aims to increase domestic coking coal production to 140 MT by FY 2029-30, thereby reducing dependency on imports in the steel sector. Other key strategies such as promoting commercial mining, expediting production from allocated blocks, and enhancing regional exploration (2525 sq. km by 2024) also play a crucial role. The introduction of the National Coal Mine Safety Report Portal and the Mine Closure Portal ensures responsible and transparent mining practices. The Ministry is considering the establishment of a Coal Trading Exchange to create a competitive and transparent market, further modernizing the sector.
As of January 2025, the Ministry of Coal has allotted 184 mines, with 65 blocks receiving Mine Opening Permissions. Total production from these blocks has reached 136.59 MT, registering a 34.20% year-on-year increase. This is expected to exceed 170 MT target in FY 2024-25.
Financial Incentive Scheme for Coal Gasification
The Cabinet approved the scheme for promotion of Coal/Lignite Gasification Projects of Government PSUs and Private Sector, in January 2024. With a financial outlay of ₹8,500 crore, the scheme will provide Financial Assistance for coal gasification projects under three categories and aims to accelerate coal gasification, reduce carbon emissions, enhance energy security, and promote sustainable development.
The scheme encourages both private companies and government PSUs to undertake coal gasification projects. For Category I, three applicants, Namely Bharat Coal Gasification and Chemicals Limited, CIL – GAIL Consortium and Coal India Limited were selected to be given Financial Incentives. New Era Cleantech Solution Private Limited was selected under Category III to be provided with Financial Incentive. The Request for Proposals (RFP) for Category-II was issued on May 15, 2024, and technical bids were opened on January 10, 2025. The selected applicants for financial incentives under Category-II are Jindal Steel and Power Limited, New Era Cleantech Solution Pvt. Ltd. and Greta Energy Limited.
This initiative is a crucial part of India’s target to achieve 100 million tonnes of coal gasification by 2030, reflecting a shift towards advanced coal utilization technologies.
Strengthening Coal Supply Chains
To ensure uninterrupted coal supply, robust institutional mechanisms have been put in place, including an Inter-Ministerial Committee and coordination meetings with Railways and power sector stakeholders. As a result, coal stock at Thermal Power Plants now stands at 49 MT—sufficient for nearly 21 days, even amidst logistical restrictions during the Maha Kumbh period.
To further enhance supply efficiency, the Ministry has launched the First Mile Connectivity (FMC) initiative, commissioning 39 projects with a total capacity of 386 MTPA. Additionally, the Rail-Sea-Rail (RSR) mode has successfully doubled coal movement from 28 MT in FY 2022 to 54 MT in FY 2024.
Vesting Orders for Commercial Coal Mines
A landmark policy reform came with the introduction of commercial coal mine auctions in 2020, encouraging private sector participation and modern technological adoption. The Ministry of Coal has recently issued vesting orders for seven coal mines under commercial coal mine auctions. The Coal Mine Development and Production Agreements (CMDPA) for these mines were signed on December 5, 2024.
With the vesting of these mines, a total of 107 coal mines have been auctioned under commercial coal mine auctions, with a cumulative PRC of approximately 246.60 MTPA, generating estimated annual revenue of ₹34,000 crore and employment for about 3,33,000 people.
Chintan Shivir 2.0: Deliberations on Energy Transition and Safety
The Ministry of Coal organized Chintan Shivir 2.0 on January 7, 2025, focusing on coal sector reforms, energy transition, and safety measures. The forum underscored the importance of aligning coal mining with global sustainability goals and prioritizing worker safety. The discussions held emphasized on:
- Enhancing production while integrating cleaner technologies
- Reducing carbon emissions through coal gasification
- Adoption of best practices for sustainability
- Strengthening safety standards in mining operations
The coal sector is embracing sustainability with large-scale afforestation efforts, with over 54.06 lakh saplings planted across 2,372 hectares in 2024. Under the ‘Ek Ped Maa Ke Naam’ campaign, over 1 million saplings were planted at 332 locations in 11 states. Additionally, 4,695 hectares of land have been identified for Accredited Compensatory Afforestation, and a total of 18,513 LKL of treated mine water has been provided to over 18.63 lakh people across 1,055 villages over the past five years.
Workforce in the Coal Industry
The total workforce in major coal companies under the Ministry of Coal is:
- Coal India Limited (CIL): 3,30,318 employees
- Singareni Collieries Company Limited (SCCL): 40,893 employees
- NLC India Limited (NLCIL): 20,811 employees
Mining operations follow stringent safety regulations under the Mines Act, 1952, including risk assessment, safety training, and medical screenings. Extensive healthcare services are provided to workers, with regular health check-ups to prevent occupational diseases.
Central Sector Schemes of the Ministry of Coal
The Ministry of Coal administers three key schemes:
- Exploration of Coal and Lignite – Identifies and categorizes coal/lignite resources, generating geological reports for auction/allocation. Promising areas undergo detailed exploration to upgrade resources to the ‘Proved’ category.
- Research & Development (R&D) – Overseen by the Standing Scientific Research Committee (SSRC), focusing on planning, budgeting, and implementing research projects for sector advancements.
- Conservation, Safety & Infrastructure Development – Under the Conservation and Development Act (CCDA), funds are provided for sand stowing, protective works, transport infrastructure, and mining safety improvements.
The table below highlights the budget allocation and expenditure for Central Sector Schemes in the coal sector for 2023-24, with a total outlay of ₹843.5 crores and an expenditure of ₹299.09 crores.
Conclusion
The coal sector’s remarkable growth highlights its ability to meet the increasing demand from the energy and manufacturing industries. With initiatives like coal gasification, the sector is advancing toward India’s goal of achieving 100 MT of coal gasification by 2030, promoting cleaner and more efficient energy use.
The Ministry of Coal remains steadfast in its commitment to boosting domestic coal production, reducing import dependency, and ensuring national energy security. As a key driver of economic progress, the sector continues to play a crucial role in the realization of Viksit Bharat, contributing to a self-reliant and developed India.
