The Indian coal market, hit by a steep rise in power demand, was provided a timely boost by the captive miners, as they rose to the occasion by increasing their production.
Coal production from captive sources was 83 million tonnes (mnt) in financial year 2021-22 (FY22), up 35% y-o-y from 63.15 mnt in FY21, as per latest government data.
Post-cancellation of coal block allotments by the Supreme Court in 2014, production from such mines had registered a sharp decline. However, the output has progressively increased with the gradual emergence of new miners.
Evidently, companies such as Karnataka Power Corporation, UltraTech, BS Ispat and Sarda Energy and Minerals have begun mining operations at their allocated coal blocks during FY22.
In particular, Sarda was among the first to commence production at the Gare Palma IV/7 block, which it had won in the renewed auction scheme for commercial mining based on a revenue sharing model.
Mitigating supply-demand gap
Apart from catering to their end-use requirements, some of these captive miners have been active in selling coal via auctions, thereby easing the pressure off Coal India Ltd (CIL) which has struggled to keep pace with the rising demand.
This became possible due to the amendment in the Mines and Minerals (Development and Regulation) Act, which allowed these miners to sell up to 50% of their coal produce, but after meeting the requirement of their linked end-use plant.
Recent auctions include sale of 500,000 tonnes (t) of coal from Neyveli Lignite Corporation’s (NLC’s) Talabira coal mine, which was held yesterday. On similar lines, Odisha Coal and Power conducted sale of 300,000 t of coal from its Manoharpur mine today.
Momentum to continue
The Ministry of Coal (MoC) has laid emphasis on increasing coal production from the captive blocks in order to reduce costlier imports.
On its part, the ministry has stepped up its efforts to expedite the allotment process by aggressively conducting auctions for commercial sale of coal blocks.
Besides, it has also allowed the government as well as the central and state-run public sector undertakings (PSUs) to surrender their non-operational coal mines without paying any penalty. The move is aimed to re-allocate these mines to the interested parties via auctions.
The government has highlighted that mine opening permissions have been received for 47 coal blocks and the number of operational blocks is expected to reach up to 60 in FY23, which would substantially increase captive production in excess of 140 mnt.
Leave a Reply