India's thermal coal output is expected to climb dramatically in the next fiscal year, with production from captive coal mines expected to rise from roughly 45 million tonne (mt) in the current fiscal year to 130 mt in 2022-23, according to the coal ministry. According to coal secretary AK Jain, this might free up some 'linkage coal,' allowing Coal India (CIL) to enter export markets.

 

India no longer exports coal, and CIL's international sales are limited to specific shipments to Bangladesh and Nepal. Despite the fact that energy consumption might climb by 6% in 2022-23, he said at a seminar here that the prospects for surplus coal output in FY23 appear promising.

 

India now produces 1,370 billion units (bu) of coal, but by 2030, it is expected to increase to 2400-2600 billion units. According to the Niti Aayog, thermal energy generation would increase to 2,505 bu by 2030, with non-regulated sectors providing the incremental demand, particularly for new demand from electrification of sectors such as cooking, transportation, and technologies such as bitcon.

 

CIL Chairman and CEO Pramod Agrawal believe that coal's proportion of India's entire energy basket might reach 30% by 2040. However, Bhattacharjee believes that the non-conventional portfolio expansion is falling behind. 'By 2020, India was meant to build 175 GW of solar capacity, but it only added 125 GW,' he stated.

 

According to Jain, as power demand rises, the auction market for both electricity and coal will expand. 'Mining activity would be swirling,' Jain said. Mines that aren't financially feasible for Coal India will have to be sold to public-sector mining conglomerates. 'Coal India would not have the luxury of continuing to support inefficient mines and dragging on loss-making mines,' Jain warned.

 

However, a senior CIL official told FE that a draught model document has been produced in which mines will be auctioned under the mines development operator (MDO) model, with CIL keeping ownership and allowing revenue sharing development.

 

CIL announced the closure of 23 unprofitable mines last year, saving the business about '500 crore. In the previous four years, the PSU miner has shut down 82 of these mines while also preparing to sell them to private investors. Though underground (UG) mines were on the verge of closure due to their high operating costs, the ministry changed course in 2020 and has already selected 12 UG mines for reopening under the PPP model, with new technology allowing for mining coal from deeper seams.

 

'UG mining is the only way to increase production and ensure fuel security,' said Subrata Chakravarty, former CMD of Eastern Coalfields, in an interview with FE.