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.
  • Mainly 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

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.