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India plans to increase domestic coal production

Alarmed by the economic impact of fuel shortages, India plans to mine an additional 240 million tonnes per annum (mtpa) of coal from 26 new fields in the five years to March 2022, but analysts say it is already late.
 
The plan is yet to be finalized and will be presented to Prime Minister Manmohan Singh. The ministries of power and coal and the Planning Commission are involved in drafting the plan that will be implemented by state-owned Coal India Ltd (CIL).
 
“There is no option but for Coal India to increase domestic production,” a government official said, requesting anonymity. “The coal requirement is estimated to be around 850 mtpa by the end of the 13th Plan (2017-22), with the availability being limited.”
 
The target may not be met in the initial years of the Plan, say analysts, because it takes a minimum of around six years for the coal to be mined from the date of allocating a field.
 
There’s also the problem of laying railway lines to transport the fuel.
 
“Some preliminary discussions have been held for the 13th Plan. We have projected an incremental production of 180 mt (million tonnes) over and above a production of 615 mt by the end of the 12th Plan (2012-17) provided all the planned railway infrastructure projects are completed,” CIL chairman S. Narsing Rao said. “A demand of around 66,000 megawatts (MW) of coal-based projects is being planned in the 13th Plan.”
 
Indian Railways is laying lines to ship coal from mines in Chhattisgarh, Jharkhand and Odisha at a cost of Rs.4,000 crore. The railways moves 52% of the coal mined in the country, a share that’s expected to rise to 58% in 2016-17. The shortage of last-mile rail links has slowed the movement of coal from fields to consumption points such as power generation plants.
 
Coal demand in India is expected to grow from 649 mt a year now to 730 mt a year in 2016-17, with the projected local availability being only 550 mt per year.
 
India’s bid to boost local production has got bogged down in delayed and more stringent environmental approval processes. The process by which mines are allotted has also being questioned after allegations of preferential treatment and corruption, including the period when Prime Minister Singh held the coal portfolio.

The Central Bureau of Investigation is probing the accusation under the direct supervision of the Supreme Court. The new land acquisition law is expected to make it tougher and more expensive to acquire land for mining.
 
Power projects in India, most of which are fuelled by coal, have been the hit hard by a shortage of the fuel. The power sector is the biggest consumer of coal, absorbing 78% of domestic production. In the year ended 31 March, CIL missed its production target of 468 mt by 16 mt, although output increased by an annual 5.8%. The monopoly miner failed to meet production targets in the two preceding fiscal years as well, although output did increase. The current year’s target is 482 mt.
 
With 59%, or 134,388.39MW, of India’s 228,722MW power generation capacity fuelled by coal, and 71,000MW of the 88,000MW targeted capacity in the current Five-Year Plan (2012-17) being coal-based, the government is concerned about the country’s fuel security.
 
“We are working on the preliminary projections for the 13th Plan that will be put up to the Prime Minister in the forthcoming review meetings,” said B.K. Chaturvedi, member, Planning Commission. “We are trying to provide 70,000-80,000MW capacity. The fuel requirement is likely to be of that order.”
 
In the earlier part of this year, India reeled under a chronic fuel shortage that hurt power generation, causing distribution firms to ration supply to industrial and household consumers in several parts of the country. The International Energy Agency, in its World Energy Outlook 2012 report, projected that by 2025, India will be the world’s second largest consumer of coal, after China.
 
The target of 240 mtpa is unlikely to be met, according to a Mumbai-based power sector analyst, who spoke on condition of anonymity. “The best case for financial year 2016-17 is 603 mt,” he said.

Source: livemint