INDIA COAL MINING SECTOR
2017

An infographic about India's coal sector 2017

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SECTOR OUTLOOK

With a share of 61.12% of India's total installed generation capacity as of September 30, 2016, coal is the single most important fuel in domestic electricity generation. Coal's share in power generation increased from the 60.59% reported at the end of FY2015, in spite of the measures taken to boost renewable energy generation in the intervening period. This illustrates the liklihood that coal's pre-eminent position in power generation will not be significantly changed in the short-to-medium term. Domestic mining is dominated by the publicly-owned Coal India Limited, which is also the world's largest coal miner. The company typically accounts for about 80% of India's total annual coal production. India's coal reserves of 342.13bn tonnes, the fifth-largest in the world, consist mostly of thermal coal, which is used in power plants.

Challenges

Coal mining by Coal India Limited often fails to meet domestic demand. This is primarily due to transportation infrastructure bottlenecks, as well as regular temporary mining bans imposed due to environmental concerns

 

India opened commercial coal mining to private companies in early 2016, for the first time in four decades. However, out of the 34 mine auctions, only 10 are currently producing. This low share can be explained mainly as a result of state-level regulatory and legal tussles, according to Business Standard.

 

PM Modi pledged to double India’s coal production by 2020, to 1.5bn tonnes per year. Of this, private firms of which private firms were to produce 500mn tonnes, in an effort to light up the homes of the 237 million Indians living without electricity.

 

Power producers are allowed to mine coal for their own consumption, but the potential of this is undermined by inefficient technology and fragmented captive coal blocks.

Coal imports

Source: Directorate General of Foreign Trade

Coal supply by type

Source: Mininstry of coal, ET, Bloomberg

 

Thermal coal supply by type

Source: Ministry of coal, ET, Bloomberg

India's coal reserves of 342.13bn tonnes are the fifth-largest in the world