Context: Recently, the Ministry of Coal has launched the eighth round of the commercial coal mines auction process and said that all efforts are on to stop coal import by 2025-26, which will be achieved through a series of reforms initiated by the Ministry.

Key Points

• Objective: The Ministry of Coal is actively working to cease coal imports by the fiscal year 2025-26.

• Comprehensive Approach: Various measures are being undertaken, including the enhancement of production from commercial and captive mines, to achieve the goal of self-sufficiency in coal.

• Reforms: The Ministry is implementing a series of reforms to boost coal production and reduce dependency on imports.

• Underground Mines Production: The target is to increase coal production from underground mines to 100 million tonnes (mt) by 2030, employing mass production technology.

• Commercial Mining: The eighth round of commercial coal mines has been launched, involving the auction of 39 coal blocks located in Jharkhand, Odisha, Maharashtra, West Bengal, and Bihar.

• Legislation: The coal blocks fall under the purview of the Coal Mines (Special Provisions) Act (CMSP) and the Mines and Minerals (Development and Regulation) Act (MMDR).

• Advisory Role: SBI Capital Markets is the sole transaction advisor for the Ministry in these commercial coal mine auctions.

• Rail Connectivity: Efforts are being made to enhance rail connectivity for the efficient transportation of coal from mines.

• Captive/Commercial Contribution: Captive and commercial coal mines are making a substantial contribution to overall production, according to Coal Secretary Amrit Lal Meena.

• Future Investment: The Ministry emphasizes that investment in the coal sector offers good returns, considering the anticipated increase in domestic coal demand.

• Underground Mining Expansion: The Ministry aims to increase production from underground coal mines to 100 mt by 2030, focusing on policy measures to promote underground mining.

• Environmental Impact: Underground mining is highlighted for its lower environmental impact compared to open-cast mining, as it requires less deforestation and involves minimal displacement of people.

Underground Mining

• Underground mining is a method of extracting minerals and valuable resources from beneath the Earth’s surface.

• Unlike surface mining, where minerals are extracted from an open pit, underground mining involves digging tunnels and shafts to reach the deposits located deep below the surface.

• This method is used for various types of minerals, including coal, metals, gemstones, and other geological resources.

Commercial Mining

• Commercial mining refers to the process where private sector entities are permitted to engage in coal mining activities for commercial purposes without any end-use restrictions. The key features of commercial mining include:

• The introduction of commercial mining represents a shift from the earlier regime, where coal mining was largely dominated by public sector entities. This reform is aimed at attracting private investment, fostering competition, and promoting efficiency in the coal mining sector.

Star Rating Registration process for Coal and Lignite Mines

• The Ministry of Coal has initiated the Star Rating Registration process for Coal and Lignite Mines for the financial year 2022-23.

What is the data on Coal Production in India?

• Coal is the most important and abundant fossil fuel in India. It is found in a form of sedimentary rocks and is often known as ‘Black Gold’.

• Coal is classified as a nonrenewable energy source because it takes millions of years to form.

Occurrence of Coal in India

• Gondwana Coal Fields:  Gondwana coal comprises about 98 percent of the total reserves and 99 percent of the production of coal in India. Gondwana coal is said to be about 250 million years old.  

• Tertiary Coal Fields: Its share is only about 1% of the total production in India. It bears coals of younger age; from 15 to 60 million years.  

• Lignite Coal Fields: Tertiary coal is the lignite coal. The coal is of inferior quality, with around 30 to 50% carbon. India’s largest ignite deposits are at Neyveli in Tamil Nadu.

• India Coal Reserves: India is the world’s second-largest coal producer and 5th largest country in terms of coal deposits.

• Major Coal Producing States: During 2022-2023, the four major coal producing states were Odisha (24.52%), Chhattisgarh (20.70%), Jharkhand (17.52%) and Madhya Pradesh (16.35%). These four states together contributed about 79.08% of the total coal production in the country.

• India’s Coal Imports: The 5 major coal importers to India are Indonesia, Australia, South Africa, USA & Russia.