Thursday, October 3, 2013

Coal mining - Is private participation the answer?


Coal, with a proven reserve of 860 billion tonnes is the most mined mineral in the world. Also, the demand curve for this sector is continuously rising. Major factors leading to a rise in the demand include the growing power sector in countries such as India and China and rising steel production. Aditionally, stringent environment regulations, lead to delay in achieving production targets to match the demand from various sectors dependent on coal.
 
The gap between demand and availability of coal in India is expected to rise every year. As per the 12th Plan, the estimated demand of coal will rise to 980 MT by 2016-17 and 1373 MT by 2021-22 while the supply of domestic coal is expected to be 795 MT by 2016-17 and 1102 MT by 2021-22. Today nearly 60% of the country's total installed power capacity of 2,09,276 MW is generated using coal. India ranks fourth in coal reserves (286 BT) and is the third largest coal-producing country in the world.
 
Though coal demand has risen by around 9% over the last four years (FY 2006-07 to 2010-11), production which grew by around 5% during the same period has not kept up with it. The domestic industry can supply only 534.53 MT coal as against the demand of 696.03 MT in FY 2011-12. Organisations are acquiring mines abroad in order to augment capacity and meet demand. Besides, there is also an urgent need to adopt measures such as rationalisation of coal linkages, dedicated freight corridors to improve the situation, developing skillsets of mining professionals, promoting under-ground mining and clean coal technologies for sustainable development. Additional R&D is required to promote coal to liquids (CTL), coal bed methane (CBM) and Underground coal gasification (UCG). The land acquisition process needs to be streamlined.
 
 
The strategic importance of coal for India
 
 
Coal is India's largest commercial source of primary energy. Policymakers and planners expect coal to continue to dominate as the mainstream energy source for the next several years. Further, coal has the largest domestic reserve base, in terms of equivalent energy, and the longest resource life compared with other major fuel choices of oil, natural gas, and uranium.
 
 
The power sector is the main buyer of coal and accounts for about 74% of all production in the country. It connects over 166 lakh households while continually increasing coverage under various rural electrification programmes. Other key buyers are the metallurgical (6.9%) and cement (2.5%) sectors, which contribute to infrastructure development.
 
 
Given this importance of coal to sustained growth, it is essential to ensure its continued supply to consumers at an affordable cost. This appears to have become increasingly difficult as India is observed to import coal at an annual growth rate of 22% in order to meet its domestic needs.  
 
 

1 comment:

  1. Goyal Energy Solution (GES) is a leading name in the coal trading, coal mines, steel grade coal in north east India.


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