Coal production from auctioned mines set to soar to 45 mt this fiscal

The Coal Ministry is hopeful of domestic production from auctioned mines to reach pre-cancellation levels when the current financial year comes to an end. The Supreme Court had cancelled allocations of 208 coal blocks in August 2014. This included 42 coal producing mines.

“The production from 42 operational coal mines during the pre de-allocation period (2014-15) was 43.22 million tonnes. Production stopped in these mines when the Supreme Court had cancelled allocations. This year (2019-20) we expect coal production from the mines auctioned or allocated after the cancellation to reach the pre de-allocation levels,” a Coal Ministry official told BusinessLine . The Ministry estimates that in 2019-20 about 45 million tonnes of coal may be produced from these auctioned or allocated coal mines.

The higher production does not necessarily means lower coal imports. “There is a demand–supply gap of 120 million tonnes in the country that can be met by domestic output. If the allocation was not cancelled, we could have bridged this gap by 2021-22. Besides, there will be a remaining demand for 105-110 million tonnes of imported coal as the projects are based on those imported grades,” the official said.

In 2014-15, coal imports stood at 217.78 million tonnes. They fell to 203.95 million tonnes in 2015-16 and 190.95 million tonnes in 2016-17. The import of coal has since increased to 208.27 million tonnes in 2017-18 and further to 235.24 million tonnes in 2018-19. But the production from these mines and imports is a fraction of the total coal production of the country. The all-India raw coal production has also increased from 565.77 million tonnes in 2013-14 to 730.35 million tonnes (provisional) in 2018-19. The absolute increase in all India coal production from 2013-14 to 2018-19 is at 164.58 million tonnes. This is largely dominated by production from Coal India Ltd and its subsidiaries.

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