A total of 11 captive and commercial mines are expected to commence production in the current financial year ending March 2023, with five blocks being dedicated to power sector and two for steel production.

“By the end of FY23 (March 2023), a total of 48 captive and commercial mines will be in operation, with 11 new mines expected to come on stream. Five of these are located in Jharkhand and will be dedicated to power production by companies such as NTPC, Damodar Valley Corporation and Punjab Electricity Board, and to steel production by JSW steel and Araanya,” the International Energy Agency (IEA) said in its latest report.

For the ongoing fiscal year, captive and commercial mines are expected to raise their production considerably to about 140 million tonnes (mt). In FY22, captive mines increased their production by around 30 per cent y-o-y to a total of about 90 mt, it added.

Strategic pillar

Commercial mining is the government’s third strategic pillar to boost India’s domestic coal production, the IEA pointed out.

In November 2022, the Coal Ministry launched the 6th round of commercial mine auctions, including 141 coal mines, of which 71 are new mines, 62 are ones not awarded in previous auctions and eight are ones for which single bids were received in the 5th auction. This is the largest coal mine auction so far.

“At this stage, it is difficult to assess how fast and strong the ramp-up of production in commercial mines will be from 2025. Vedanta has reported that it expects to bring into operation, Odisha’s Radhikapur (West), a block awarded in November 2020 in the first auction during FY23,” the IEA report said.

Increasing production

According to the Coal Ministry, the production from captive and commercial blocks increased to 67.16 mt in April-November period of FY23 from 50.49 mt a year-ago.

The Ministry expects three coal mines to start production by March 2023, besides the three blocks which already commenced operations during the fiscal year. The Coal Ministry is hopeful for more than 120 mt production from the captive and commercial coal blocks in FY23, with an increase of about 40 per cent over 85.32 mt production in FY22.

Overall, IEA projects that India’s domestic supply will continue to grow beyond 2025, in line with steady increase in demand while also striving to reduce import dependency.

Total production will surpass 1,000 mt in 2025, totalling 1,021 mt. Almost all of the coal produced will be thermal coal, that is mainly used for power generation. Coal India (CIL) is expected to contribute substantially to the overall domestic production, it added.