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Coal production surges 11% in first 45 days of 2015-16 amid core sector misery

India’s coal production has surged by 11% in the first 45 days of 2015-16, assuming greater significance as it comes on the back of the highest increase in output in 40 years recorded last fiscal. Core sector growth dipped to a 17-month low of -0.1% in March, but coal output rose by 6% that month.

“From a scenario last year when outages were common and power plants were suffering for want of coal, all power plants in the country today have an average 20 days of coal inventory.

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Coal supply is no longer a problem,” a top government official told ET, adding that several new mines are coming on stream as even Oppositionruled states like West Bengal are now backing coal projects. In 2014-15, Coal India produced 493 million tonnes of coal.

“This marked a 32 million tonne surge in output which is more than the cumulative increase recorded in the previous four years (31 million tonnes) and the highest since 1975,” the official said, adding that output has increased by 11% between April 1 and May 15 this year.

About two dozen brownfield and greenfield mining projects were made operational last year, contributing nearly 21 million tonnes or 64% of the incremental output.

This number would go up further this year as the total capacity of these mines is nearly 40 million tones a year. “We have secured environmental clearances for 41 coal mining projects and managed to acquire over 2,000 hectares of land, pending for years, by working intensively with state governments and bringing them on board,” the official said. The Mamata Banerjeeled West Bengal government has handed over land for six long-stalled coal fields in the state in recent weeks, the official said. The Maharashtra government which had withheld local clearances for several mines in the state has also started rolling back the red tape.

Western Coalfields that was on the verge of turning sick after three successive years of losses, has already commissioned two new mines in Maharashtra in the first two months of 2015-16 and is expected to turn around as more mines become operational.

States like Jharkhand, Chhattisgarh and Odisha have also helped fast-track clearances for three critical rail lines in untapped coal-rich belts to evacuate a potential 300 million tonnes of coal a year. These three railway projects worth Rs 7,500 crore are now expected to be complete before their scheduled deadline of December 2017, officials said.

“The coal block auctions that would boost states’ coffers, have helped change their approach towards clearing projects. A coal project monitoring group is negotiating hurdles for all stalled Coal India projects,” the official said.

Coal is one of the eight core sectors tracked by the government, including crude oil, natural gas, refinery products, fertiliser, electricity, steel and cement. Together these sectors account for 38% of India’s Index of Industrial Production ( IIP), which grew by 2.8% in 2014-15, but had touched a five month low of 2.1% in March 2015.


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