February , 2024
Consolidation in the coal sector
14:32 pm

Kuntala Sarkar

India’s coal sector showcases resilience amidst global renewable energy trends, addressing environmental regulations and meeting the nation’s energy needs. Technological advancements and government backing contribute to enhanced efficiency.

India has recorded a 6.60% surge in power generation from April to January 2024 compared to the corresponding period in the previous year. The Ministry of Coal highlighted a significant 10.06% increase in coal-based power generation during this period. Concurrently, coal imports for blending witnessed a substantial reduction of 36.69%, declining from 30.58 million tonnes to 19.36 million tonnes compared to the previous year. This decline emphasizes India’s dedication to achieving self-sufficiency in coal production and reducing reliance on foreign sources, despite escalating power demands.

Despite global shifts, coal remains a significant contributor to India’s power generation, accounting for over 70%, supporting industrial expansion and economic development.

The coal sector has demonstrated resilience in meeting its capital expenditure (capex) targets. Coal India Limited (CIL) and Neyveli Lignite Corporation India Limited (NLCIL), under the Ministry of Coal, have achieved 95.83% of their capex target for the fiscal year 2023-24, with an investment of Rs. 20,153 crore out of the targeted Rs. 21,030 crore as of January 2024. The current performance mirrors the ongoing trend of exceeding capital expenditure (capex) goals observed in prior years. Specifically, in FY22, CIL and NLCIL had achieved 104.88% and 123.33% of their capex targets, respectively. In FY23, both of the companies achieved around 113% of their target. 

This consistent achievement underscores the significant role of Coal PSUs in driving economic growth through increased consumption, demand, and industrial development.Government emphasis is on reducing coal transportation by roads to ease traffic congestion, accidents, and environmental impact. CIL’s First Mile Connectivity (FMC) initiatives, with a total investment of Rs.27,750 crore, are progressing across four phases, targeting completion by FY 25-26. CIL plans to establish smaller Coal Handling Plants (CHPs) with Rapid Loading Systems in new mines, enhancing efficiency.

One of the projects is the Dipka Open Cast Project (OCP) coal handling plant, completed at a cost exceeding Rs. 211 crore. Boasting an annual coal handling capacity of 25 Million Tonne (MT), the facility includes an overground bunker with a 20,000-tonne capacity and a 2.1-kilometer-long conveyor belt, enabling the rapid loading of 4,500-8,500 tonnes of coal per hour.

Prime Minister Narendra Modi has inaugurated three FMC projects of South Eastern Coalfields Ltd (SECL), a CIL subsidiary, in Chhattisgarh in this February. The FMC projects are valued at Rs. 600 crore.

These initiatives aim to modernize and streamline coal transportation, reducing charges, improving coal quality, and positively impacting the environment.

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