Robust Surge in Coal Production Over a Six-Year Period, Announces Pralhad Joshi

Minister Pralhad Joshi, responsible for Coal and Mines, disclosed the impressive progress witnessed in the production of coal from both captive and commercial coal mines. Over the past six years, this sector has experienced a consistent upswing, showcasing a remarkable growth rate of 216%.

Minister Pralhad Joshi took to Twitter to highlight a major accomplishment in the coal industry, announcing the successful auctioning of 86 commercial coal mines. This development not only signifies the government’s commitment to liberalizing the coal sector but also promises substantial economic benefits. Minister Joshi’s tweet emphasizes the potential annual revenue of ₹34,188 crore that will be generated for various states across the country.

Minister Pralhad Joshi recently held a meeting with senior officials from the Ministry of Coal to assess the performance of coal production from the auctioned mines. During the meeting, discussions centered on strategies to enhance production and achieve a notable 39% increase in the current fiscal year.

During the meeting with senior officials from the Ministry of Coal, Minister Pralhad Joshi not only reviewed the overall coal production but also specifically focused on underground coal mines. Recognizing their potential, the minister emphasized the importance of the Underground Coal Mine Mission Plan, which aims to achieve a significant milestone of 100 million tonnes of coal production.

In a momentous event in June 2020, Prime Minister Narendra Modi initiated the auction of commercial coal mines under the provisions of the Coal Mines (Special Provisions) Act, 2015, and the Mines and Minerals (Development and Regulation) Act, 1957. This landmark initiative marked the first-ever auction of commercial coal mines, opening up the sector to private participation.

According to the Ministry of Coal, a total of six tranches of commercial coal mines auctions have been successfully conducted thus far. These auctions have resulted in the allocation of 86 coal mines, collectively possessing an annual production capacity of 218.9 million tonnes per annum (MTPA). This accomplishment underscores the government’s commitment to fostering private sector participation and efficiency in the coal industry.

Currently, the Ministry of Coal is in the process of conducting the 7th tranche of commercial coal mines auctions, offering a total of 98 mines. This ongoing auction presents a significant opportunity for interested stakeholders to acquire coal mining assets and contribute to the growth and development of the sector.

The strategic allocation of these coal mines through transparent and competitive bidding processes aligns with the government’s objective of increasing coal production and reducing dependence on coal imports. It also aims to enhance the ease of doing business in the coal sector, attract private investments, and promote a more efficient and competitive coal market.

Before the initiation of commercial coal mine auctions, the operationalization process for coal mines typically took approximately five years on average. However, the introduction of commercial auctions has significantly reduced the average duration for operationalizing coal mines, leading to quicker production commencement. The tangible outcomes of this expedited timeline can already be observed through the contribution of production from commercial mines. Notably, the first commercial coal mine allocated through auctions commenced production within a remarkably short period of one year.

As per the Ministry’s report, coal production from commercial coal mines during the fiscal year 2021-22 amounted to 1.15 million tonnes (MT). This production figure demonstrates the initial contribution from commercial coal blocks that were operationalized during that period.

Moving ahead to the fiscal year 2022-23, the production from commercial coal mines witnessed a substantial increase. The report states that coal production reached 7.12 MT during this period. This remarkable growth in production is attributed to the operation of four specific commercial coal blocks: Sulyari, Garepalma IV/1, Garepalma IV/7, and Gotitoria mines.

According to the Ministry’s projections, it is anticipated that an additional six commercially auctioned coal mines will be operationalized in the upcoming fiscal year, FY 2023-24. These new coal mines, which have been successfully auctioned to private entities, are expected to contribute significantly to the coal production landscape.

The Ministry further forecasts that the combined coal production from these six operationalized mines in FY 2023-24 will amount to an estimated 12.2 million tonnes (MT). This expected increase in production showcases the potential impact of the commercial coal mining sector in meeting the growing energy demands of the nation.