Coal Production in India

24 Mar 2025

Coal Production in India

India has surpassed 1 billion tonnes of coal production in FY 2024–25.

Recent Reforms in Coal Production Regulation

  • Coal Mines (Special Provisions) CMSP Act, 2015: Enabled commercial mining by private entities.
  • Mines and Minerals (Development and Regulation) Amendment Act, 202: Introduced Composite Prospecting Licence-cum-Mining Lease (PL-cum-ML) for coal.
  • Composite Prospecting Licence-cum-Mining Lease (PL-cum-ML): A single integrated license allowing:
    • Exploration phase (Prospecting Licence – PL).
    • Direct transition to mining (Mining Lease – ML) upon discovering viable coal deposits.
  • Foreign Direct Investment (FDI) Policy: 100% FDI permitted in coal mining under the automatic route, attracting global expertise.
  • Integrated Coal Logistic Policy and Plan, 2024: Aims to enhance transportation efficiency of coal.
    • Development of multi-modal transport networks (rail, road, waterways, conveyor belts).
    • Digital tracking for seamless movement.
    • Promotion of eco-friendly logistics.
  • PM Gati Shakti – National Master Plan for the Coal Sector: Focuses on holistic infrastructure planning for efficient coal production and distribution.It involves: 
    • Geospatial planning for coal evacuation.
    • Dedicated freight corridors for coal transport.
    • Mission Coking Coal: Aims to reduce dependency on imported coking coal.
    • National Coal Index (NCI): Established to serve as a benchmark coal price index.

Distribution of Coal in India

Gondwana Coal Fields

  • It accounts for 98% of total reserves and 99% of production in India.
  • Age: Formed 250–300 million years ago (Permian period).
  • Locations: Found in peninsular India, including:
    • Damodar Valley (Jharkhand, West Bengal).
    • Mahanadi Valley (Chhattisgarh, Odisha).
    • Godavari Valley (Maharashtra).
    • Narmada Valley.
  • Characteristics of Coal of Gondwana
    • High carbon content and high calorific value.
    • Contains moisture and volatile matter.
    • Coal ProductionMainly bituminous and sub-bituminous coal.
  • Uses: Power generation, steel production, industrial applications.

Tertiary Coal Fields

  • Formed 15–60 million years ago (Tertiary period).
  • Found in Northeastern states and parts of Jammu & Kashmir.
  • Key Locations:
    • Assam, Meghalaya, Nagaland, Arunachal Pradesh, Jammu & Kashmir.
    • Darjeeling foothills (West Bengal), Rajasthan, Uttar Pradesh, Kerala.
  • Characteristics:
    • Higher moisture content, lower carbon concentration.
    • Mostly lignite or peat, with lower calorific value.
  • Uses: Mainly for power generation and domestic heating.

Types of Coal Found in India

Type Features Carbon Content Location in India
Anthracite
  • Highest grade coal
  • Hard, brittle, black, lustrous
80-95% Jammu & Kashmir
Bituminous
  • Medium-grade coal with high heating capacity
  • Most commonly used for electricity generation
60-80% Jharkhand, Odisha, West Bengal, Chhattisgarh, Madhya Pradesh
Sub-bituminous
  • Black, dull (not shiny)
  • Higher heating value than lignite
35-60% Found in some eastern and central coalfields
Lignite
  • Lowest grade coal
  • Least carbon content, high moisture
<35% Rajasthan, Tamil Nadu, Jammu & Kashmir

Status of Coal Production

  • India is the 2nd largest Consumer and 2nd largest producer of coal globally.
  • Major Coal Producers in India
    • Coal India Limited (CIL): Largest producer with 773.81 MT in FY 2023–24.
    • Singareni Collieries Company Limited (SCCL): Major supplier for Southern India.
  • India has the 5th largest geological coal reserves.
  • Top Coal Producing States in India
    • Jharkhand – Largest reserves, major source of coking coal
    • Odisha – High production from major thermal coal mines.
    • Chhattisgarh – One of the world’s largest coal mining regions.
    • West Bengal – Historic Raniganj coalfields.
  • China is the largest producer, contributing 50% of global coal production.
  • Top 3 coal reserves globally: USA, Russia and Australia.

Reasons for Coal Dependency

  • High Import Dependence: India lacks sufficient high gross calorific value (GCV) coal, which has low ash and sulphur content, leading to heavy reliance on imports from Australia, Russia, South Africa, and the US.
  • Sectoral Demand: Industries like iron and steel are major importers of coking coal due to its superior quality.

Interventions to reduce Coal Import

  • Coal Price Control (Since 1954): The government regulates coal prices to discourage high-grade coking coal usage in power generation.
  • Coal Blending Policy (2012): The Central Electricity Authority (CEA) recommended blending 10-15% imported coal with Indian coal to improve efficiency in power boilers.

Economic Significance of the Coal Sector

  • Energy Production and Demand: Coal is the primary energy source, meeting over 50% of India’s energy needs.
    • Thermal power, mainly coal-based, has accounted for over 70% of total electricity generation in the past decade.
    • Despite the growth of renewable energy, coal will still contribute 55% of power generation by 2030 and 27% by 2047.
    • Projected demand: 1,462 MT by 2030 and 1,755 MT by 2047.
  • Transportation and Railway Freight: Coal is the largest contributor to railway freight, making up 49% of total freight income.
    • In FY 2022-23, coal freight generated Rs. 82,275 Crore, accounting for over 33% of total railway earnings.
  • Government Revenue: The coal sector contributes Rs. 70,000+ Crore annually through royalties, GST, and other levies.
    • Royalties (2022-23): Rs. 23,184.86 Crore.
    • Additional Contributions (2022-23):
      • District Mineral Fund: Rs. 5,430.25 Crore.
      • National Mineral Exploration Trust (NMET): Rs. 364.38 Crore.
      • GST: Rs. 6,899.42 Crore.
  • Employment Generation: 239,210 employees work in Coal India Ltd (CIL) and its subsidiaries.
    • Contractual workforce: 65,000 workers in mining and 37,000 workers in outsourcing services.
    • Coal transportation engages 24,000 trucks, supporting 50,000 people.
    • 30,000 workers employed in captive/commercial coal mining companies.
  • Financial Contributions: 
    • Dividend Payments: CIL pays an average of Rs. 6,487 Crore annually, with Rs. 9,475.85 Crore in FY 2022-23.
    • Capital Expenditure: An average of Rs. 18,255 Crore annually, enhancing infrastructure and resource optimization.
  • Corporate Social Responsibility (CSR): Coal PSUs spend Rs. 608 Crore annually on CSR, with CIL alone contributing Rs. 517 Crore per year.
    • 90% of CSR spending focuses on healthcare, education, water supply, and skill development in coal-producing regions.

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UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

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