The coal sector, which was looking gloomy until a year ago, has been rejuvenated due to the significant increase in the coal production. This increase in domestic coal production is leading to lower imports.
According to latest government figures, coal imports came down by 8.9% during the 2015 April-November period i.e. from 136.6 MT in April-November (2014) to 119.9 MT for the corresponding period in 2015. In value terms, it has come down from Rs 68,822 crore to Rs 54,607 crore. India had imported 212.103 million tonne of coal worth Rs 1 lakh crore in the last fiscal (2014-15).
Also, the production of coal by the state-run Coal India Limited (CIL) increased by 8.8% during the 2015 April-November period as compared to the same period in 2014. The company produced 321.38 MT coal as against 295.40 MT during the same period last year, a jump of almost 26 MT. The company is eyeing a production target of 548.78 MT by this fiscal end. According to an official of a CIL-subsidiary, there has been a considerable improvement in the sector because of the opening of mines whose allocations were cancelled by the Supreme Court. The Coal Ministry, he said, is also investing in a big way to improve the infrastructure to ramp up production.
“The ministry has partnered with the railways and coal bearing states in order to strengthen infrastructure creation. It has signed MoUs with the governments of Jharkhand, Chhattisgarh and Orissa — major coal producing states. The ministry is also investing heavily in new railway rakes, expediting railway lines and using modern equipments. All this is paying off,” said the official.
He also said the increase in production is attributed to the coal auction being conducted in an efficient and transparent manner. In order to implement the auction system after the Supreme Court’s order, an Ordinance was promulgated to legally enable the government to reallocate 204 coal mines — previously cancelled by the Apex court — and ensure smooth transfer of right, title and interests in the mine along with its land and other associated mining infrastructure to the new allocate to be selected through auction or allotment to government companies.
This week, the Coal Ministry signed an MoU with the Railways Ministry for procurement of 2,000 wagons (33 rakes) in the first outgo. This will result into a speedy supply of wagons for coal loading in dedicated circuits. The Coal Minister Piyush Goyal, after signing the MoU, said that it will help in fulfilling the 1 billion target of CIL. Initially the rakes will be inducted and run in two main coal loading zones of Indian Railways — South East Central and East Coast
In March, Parliament passed the Coal Mines (Special Provisions) Bill 2015, replacing the Ordinance. Under the Act, the Centre has so far successfully auctioned 31 coal mines in three rounds and allotted 42 coal mines/blocks to Central or state government companies. The four round of auction of 8 coal mines has also been announced.
The company, interestingly, had been missing the target for the last couple of years. In 2013-14 fiscal, the company had produced 462 MT against the target of 482 MT. In 2014-15, the company recorded an output of 494.23 MT. The CIL accounts for over 80% of the domestic coal production. It has set an ambitious target of 1 billion tonne coal production by 2020. Almost all the coal producing subsidiaries of CIL have registered a positive growth in production.