Govt charts out plan to slash coal imports

Govt charts out plan to slash coal imports

To achieve self-sufficiency in production of coal and reduce the dependence on imports, the coal ministry has drawn up a strategic plan to slash imports of the fuel from over 20% now to 11% by the end of FY26, coal secretary Amrit Lal Meena told FE.

The plan will entail a big boost to Coal India’s output, as also acceleration of mining activities by captive coal mines that now have the freedom to sell surplus production in open market.

According to the secretary, the government has also set a target to gasify 100 million tonnes of coal by FY30. A scheme for this has been worked out with details of the capital expenditure required, and this would be put up soon for approval of the Union Cabinet, he added.

Coal gasification can help in reduction of imports of ethanol, methanol, di-methyl ether, ammonium nitrate, all byproducts of the gasification process.

India’s coal imports peaked in volume terms in FY20 at 249 million tonne (mt), while in FY23 also the inward shipments were quite high at 236 mt. The value of coal imports stood at a massive $48 billion last fiscal. Rising coal imports have made it another strain on the country’s current account, along with imports of crude petroleum and, of late, edible oils.

While coking coal (used for manufacturing of steel) needs to be imported for lack of domestic resources, a large art of thermal coal imports too is unavoidable for use in plants that are run on fuel varieties with low sulphur content.

The country’s share of imported coal stood at 21% in FY23 against 26% in FY20, which includes coking coal and thermal coal.

“We want to substitute about 110 million tonne which is is half of the total imports now through higher local production,” Meena said.

India imports coal mostly from Indonesia and Australia.“Coal India Ltd and its subsidiaries and other PSUs are showing a production growth of 10% since last year. We hope that CIL will achieve the projected 10% annual production growth in the two years too,” said Meena.

The current coal production by CIL stands at 780 million tonne. Additionally, the government has set a target of 162 million tonne coal production by FY24 and 182 MT by FY25 from private captive and commercial mines. By FY26, the private sector is seen producing 220 million tonne of coal.

Moreover, the coal ministry has also prepared a Coal Evacuation Logistic Action Plan in collaboration with the railways ministry to augment transport infrastructure and ensure coal availability at plants which has been approved on December 3.

Under this plan, the government has identified all the possible additional rails which are required to be constructed along with railway lines that needs to be tripled.

“All such projects have been identified and included into the railways long term plan. As many as 137 such projects have been identified across the country so far,” the coal secretary said.

The strategy also includes mechanized coal handling facilities in mines. This will allow mines to transport coal directly from the pit to the designated place via conveyor belts which will also help in reduction of pollution. Coal handling facilities are being constructed in all large mines for mechanized moving of the fuel. “CIL will spend Rs 20,000 crore for such projects, 103 of which are set to be completed by FY26.” The government has also identified 84 such mines which accounts for 90% of the total coal produced in the country.

So far, 91 coal mines have been successfully auctioned and another 66 are under auction in the ongoing 8th and 9th tranches.

Earlier, the coal ministry has also asked coal block owners to operationalise their mines at the earliest. “We have plans to operationalise a total 10 mines by the end of FY24,” Meena said. “Of these, 3 mines have already come into operation and another 7 are likely to get operationalised by March 2024.”