No import, India to start exporting coal from 2025-26: Coal minister Pralhad Joshi

Representative image.

India will start exporting coal from 2025-26, Union Minister for Coal, Mines and Parliamentary Affairs Pralhad Joshi said on March 29 in New Delhi, while asserting that importing coal for thermal power generation will cease in about two years from now.

Joshi was speaking at the launch of the seventh round of commercial coal mines auction and signing of agreements with successful bidders of the sixth round of auctions. The event had Union Defence Minister Rajnath Singh as the chief guest.

Joshi stated that with a 14 percent increase, coal production is expected to touch the record figure of 880 million tons (MT) this fiscal and offtake is likely to touch 900 MT. He also said coal production exclusively from captive and commercial mines has crossed 100 MT.

Later, talking to reporters on the sidelines of the event, Joshi said his announcement was for non-coking coal only. India's cumulative total estimated coal reserve is about 3.61 lakh million tons.

"From a net importer of coal, India is moving towards becoming a net exporter of non-coking coal. India's imports of substitutable coal were 90 MT, which will be stopped by 2025-26 as the country will start exporting dry fuel. We will stop the import of thermal coal, except the import of coking coal," Joshi said.

The minister explained that there will not be a blanket ban on coal imports as there are imported coal-based power plants that are designed in a certain way. He, however, assured that if such imported coal-based power plants make the required changes in their technology, they too would be allocated domestic coal by the government.

With the launch of the seventh round of auction for commercial coal mines, a total of 106 coal blocks are now on offer. Out of 106 coal mines, five coal mines are being offered under a second attempt for the sixth tranche as only single bid were received for these mines. Of the remaining 101 coal mines being offered under seventh tranche, 32 are new coal mines and 69 mines are being rolled over from earlier tranches.

The mines being auctioned are spread across coal and lignite bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu and Bihar.

On March 29, the coal ministry also signed agreements for 29 coal mines which were auctioned under the sixth round of commercial coal mines auction. Some companies who won the bids include JSW Steel Limited, JSW Cement Limited, Ultratech Cement Limited, Shree Cement Limited, Assam Mineral Development Corporation Limited, Jindal Power Limited, Dalmia Cement (Bharat) Limited, Rungta Sons Private Limited, Ambuja Cements Limited and Gujarat Mineral Development Corporation Ltd.

The cumulative peak rated capacity (PRC) of 29 coal mines is 74 MTPA. These mines upon operationalisation are expected to generate an annual revenue of Rs. 14,497 crores calculated at PRC of these coal mines and will provide employment to about one lakh people, the ministry said in a statement.

Talking about meeting India's growing power demand, Joshi said his ministry will ensure there is enough coal at thermal power plants not just during the summers, but also during monsoons. In April, the power ministry has projected the peak electricity demand to touch 230 gigawatts (GW).

Coal secretary Amrit Lal Meena said 87 coal mines have been successfully auctioned across various tranches of commercial coal mine auctions so far.

Commercial coal mining was introduced in order to enhance domestic coal production and pave the way for energy security. Prime Minister Narendra Modi launched the first tranche of auction of coal mines for commercial use on June 18, 2020. This was a landmark step for the Indian coal sector, as for the first time, coal was allowed to be mined commercially by all companies and without any restriction on end use. Also, with a view to have a market linked approach to coal pricing, the National Coal Index was launched in the country.

"Since 2019, we have also operationalised about 27 mines to produce coal. This includes coal mines owned by the government, various PSUs and the private sector. Coal production from commercial coal mines is expected to reach more than 1 billion MT in FY 2023-24," M Nagaraju, additional secretary and nominated authority of coal auctioning, told Moneycontrol.

For the first time in history, the captive and commercial coal mines together have breached the 112 MT, he said.

Data from the coal ministry showed that from about 50 auctioned coal mines under the private sector since February 2020, at least three have become operational. "This in itself is commendable as earlier it used to take up to 10 years to operationalise a new coal mine. Now we have simplified the processes so much and are offering 50 percent incentive for those who get their coal mines ready early, which is why we are seeing new coal mines getting ready in record 2.5 years in India," Meena told Moneycontrol.

Joshi said coal would remain important for India's economy, especially the power sector till about 2040 at least.