2020 was a tumultuous year for everyone. The economy suffered greatly as industries grinded to a halt. However, certain sectors held up better than the rest and even showed stable performances. One such sector is the Indian coal mining.
Coal India Ltd(CIL), the largest coal-producing company in the world, accounts for almost 82% of the total production with the rest contributed by the Vedanta, Emil, Dilip Buildcon and AdaniCoal Project. Coal production in India was 730.87 million tonnes in 2019-20 as compared to 728.72million tonnes in 2018-19, which shows a modest growth of 0.30%. Out of total, CIL produced 602.15 MT in 2019-20 despite the pandemic. It had previously recorded 606.89 MT.
While most MDO companies have recently entered the coal industry, their coal projects have been churning out impressive figures. For example, EMIL produced an impressive 11.44 MnTe of coal just a year after it commenced operations. Similarly, Adani’s Parsa East & Kanta Basan coal block has a peak capacity of 15 MMTPA. One can certainly expect the Adani coal project to pump out huge numbers too.
India imports 235 million tonnes of coal annually. Almost half of the imported coal is non-substitutable as its grades are not available in the country. However, the increasing production from every single EMIL, VFR and Adani Coal Project means that this figure could be cut in half. India’s coal imports have already fallen by 14% to 196.13 million in the last fiscal, lending legitimacy to the prediction.
Coal Secretary Anil Jain said, “We are on track to producing 700 million tonnes of coal in 2020-21 fiscal. We will be able to cut substitutable coal imports with this rise in production.”
The Centre’s decision to hold auctions for coal mines also turned out favorably for players like Adani Group and Vedanta, where they made significant gains for their future coal projects. Adani, in particular, made successful bids for a number of mines, with Gondulpara mine in Jharkhand and Dhirauli mine in Madhya Pradesh being the notable ones.
On the completion of preliminary operations, every single Adani coal project will start production in earnest. This will add to India’s total coal production, relieving the pressure of the ever-growing domestic demand.
Additionally, CIL has identified 15 mining projects for MDO operations in an effort to increase the production. MDOs are becoming the preferred model for coal mining with at least 28 mines being operated by them.MDO operations undertaken by EMIL, Dilip Buildcon, VPR Mining and Adani coal project will prove indispensable if India is to reduce its coal imports.
Coal-fired power plants supply the country with almost 80% of its electricity. Domestic demands will slowly be met by every EMIL, Hindalco, VFR and Adani coal project, rendering coal imports redundant.
The Home Minister had earlier said that the coal sector would be a valuable contributor to India’s growing economy. This bodes well for the sector as the CIL, EMIL, Vedanta and Adani coal projects can expect ample investments.
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