With nine successful rounds of coal blocks auction where 120 mines have been handed over to the private bidders for commercial mining since 2020, the government might come up with one more round of auction, before stoping the process.
The government feels there may not remain any more appetite for coal blocks in the country after the tenth round, an official told FE.
The coal ministry further projects coal production capacity from the captive-cum-commercial mines reaching 700 million tonnes. Combined with the target of 1 billion tonne output by Coal India by FY26, the cumulative coal output capacity of the country is close to 2 billion tonnes, the source said.
“Already we are reaching almost 700 million tonnes capacity from the commercial auction. CIL itself will have 1.2-1.5 billion tonnes of capacity. This will become almost 2 billion tonnes,” the official said. At 2 billion tonne domestic production, the country would be able to cut its dependence on imports and meet the rising demand for power.
The government had introduced the auction-based regime back in 2014 allowing private sector players to participate in coal mining and production. However, this was only limited to the captive usage in their own end use plants. The sector was then opened for commercial coal mining by private players in 2020 when the first auction of commercial mining was launched with allocation of 20 coal mines.
In the last three years, the government has conducted a total of nine rounds of commercial auctions of coal mines and 120 mines have been auctioned so far, according to the official. Till December of the calendar year 2023, the government had issued vesting orders for 36 coal mines and signed Coal Mining Development and Production Agreement for 37 mines, the government had earlier said.
Moreover, the government aims to produce 186.6 million tonne coal exclusively from captive mines during the upcoming financial year 2024-25 and then further increase it to 225.7 million tonnes in FY26. The ministry envisages coal output of 383.6 million tonnes by FY30.
Since March 2023, six new commercial mines have started production taking the total number of commercial coal mines to 53, as per government data. Of the 53 mines, 33 are allocated to the power sector for captive power consumption, 12 for captive consumption for the non-regulated sector, and eight have been allocated for the commercial sale of coal.
The total coal production from captive and commercial coal mines in January stood at 14.30 million tonne, indicating a year-on-year growth of 29% from 11.06 MT in the same month of the previous year.
Coal production from captive and commercial coal blocks has grown by 26% on year during the first ten months of the current financial year to around 112 MT. “Coal production will be exceeded in the first two weeks of February, and is on track to become the highest of its kind ever,” the government had earlier said.
“The Ministry of Coal is taking all necessary steps to operationalize coal blocks within timelines to further increase production and dispatch and to meet the increasing energy demand of the country.”