India recently finalized the allocation of 13 commercial coal mines in its eighth and ninth rounds of auctions, with the aim of increasing domestic production and minimizing dependence on imports. These mines, eight of which are for thermal coal and five for coking coal, are located in key states such as Madhya Pradesh, West Bengal, Maharashtra, Chhattisgarh and Jharkhand. Madhya Pradesh is home to the highest number of allocated mines.
Launch of coal auctions
Since 2020, the auction process for commercial coal mines has resulted in the award of 104 mines, with a cumulative production capacity announced at 226 million tonnes per year. Producers can now sell mined coal to any buyer, thus facilitating distribution, while sharing a portion of the revenues with the respective state governments.
Impact on production and shipments
For fiscal year 2023-24, coal production from captive and commercial mines saw a significant increase, up 27.06% year-on-year to 126.8 million tonnes. This 29.14% increase in coal shipments reflects the impact of the auctions on the country’s coal supply. India recorded a total production of 880.72 million tonnes of coal during this period, marking a year-on-year increase of 12.14%.
Operational challenges and import dependency
On the other hand, only a few of the awarded mines are currently in operation, due to lengthy approval processes and difficulties with foreign financing. The persistent gap between domestic production and growing demand underlines the need for imports to meet the country’s energy needs.
India aims to produce 1.1 billion tonnes of coal by the end of the current fiscal year, with plans to increase production to 186.63 million tonnes in the next fiscal year, and to reach 383.56 million tonnes by 2030. These targets aim to gradually reduce the share of coal imports, thereby improving India’s energy self-sufficiency while meeting the challenges posed by ever-increasing energy demand.
