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Coal Vision 2030 has suggested that no new coal mines need to be allocated or auctioned beyond the current pipeline.

mines allocated

According to the document the total capacity of mines allocated and auctioned, including Coal India, SCCL and Neyveli Lignite, as on date is about 1,500 million tonnes per annum at the current rated capacity. In view of the likely demand, there is limited requirement of starting new coal mines except the ones already auctioned or allocated

In the scenario where actual demand is higher, focus could be laid on brownfield expansion of mines or re-rating of mines based on their parameters. Although there is limited business case for new mines in the immediate future, say 2022-25 horizon, it may be advisable to monitor the growth in coal demand and decide on new mines accordingly

In the short term, coal production is likely to be significantly lower than potential, although demand may be met. Majority of the mines currently auctioned or allocated (including CIL, SCCL) are scheduled to be completed by FY20. However, delayed clearances, land acquisition problems, R&R issues, evacuation constraints, etc., can delay materialisation of these plans. Based on the latest status updates, it is estimated that 33 per cent of the capacity is at risk of delay. Hence, the estimated coal production in short term, FY20-22, is 1,050MTPA, which is comparable to the demand.

Read: Supply of coal from Coal India increase 6.8 per cent

Production from captive mines is particularly at risk. More than 100 blocks have been allocated, auctioned or allotted, for captive and commercial mining till date. These blocks are estimated to have an overall capacity of 450-500 million tonnes per annum.

Based on the current status of these blocks, it is estimated that captive or commercial coal blocks may contribute 90-170 million tonnes per annum by 2020. However, this does not exclude the possibility of coal deficit at consumers’ end driven by evacuation constraints, marketing policies and mismatch between regions of production vis-a-vis consumption. Coal mining companies need to ensure continuous monitoring and portfolio planning to avoid coal deficit.

Info-  economictimes


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