Captive, commercial mines to eat into Coal India’s share by end of the decade

The production from captive and commercial mines, which accounted for 10% of India’s domestic supplies in FY21, is expected to increase its share to 19% by the end of the decade, eating into the share of mining behemoth Coal India (CIL).

According to the integrated coal logistics plan, which was approved by the Empowered Group of Secretaries on PM Gati Shakti National Master Plan in December last year, India’s total domestic supply is expected to more than double from 691.39 million tonnes (MT) in FY21 to 1,500 MT in FY30.

Of this, the share of CIL, which accounted for 83% of total domestic supplies in FY21, will drop to 75% by FY30, while the share of Singareni Collieries Company (SCCL) will drop from 7% to 6% during the same period. “CIL’s share of supply in the domestic production portfolio will decrease from around 79% in FY23 to about 75% in FY30 due to expected exponential capacity expansion increase in commercial/captive coal mining,” the plan said.

However, 95 MT of non-substitutable G1-G8 grade steam and bituminous coal would still need be imported in the near to medium-term future, it added.

Evolving dynamics

However, if the overall supply mix, including imports is analysed, the share of CIL will grow from 63% in FY21 to 66 per cent by the end of the current decade. The Maharatna company supplied 578.48 MT of coal to various sectors in FY21, which will swell to 1,120 MT by FY30.

Similarly, the share of SCCL, the country’s second largest coal producer, will grow from around 5% in FY21 to 6% in FY30. The south India-headquartered company’s supplies will increase from 48.51 MT to 100 MT. However, the share of captive and commercial mines will witness the largest growth. Captive and commercial miners accounted for just 7%, or roughly 68.8 MT of coal supplied in FY21, which is likely to grow to 17% or 281 MT by FY30.

The share of imports, which stood at a whopping 25% (228 MT) in FY21, will decline to 11% (191 MT) by FY30. Overall, India’s total coal supply will grow from 919.71 MT in FY21 to 1,692 MT in FY30.

Focus on commercial mining

Sources said that Coal Ministry’s concerted push to promote mining by private sector entities will aid the growth in output of the critical commodity, which accounts for a lion’s share of India’s power generation, by the end of the decade.

Coal will remain the mainstay for power generation in the country by the end of the current decade. However, the share of power generated from non-fossil fuel sources will account for half of the generation by FY30.

Electricity generation in India is expected to grow at a compound annual growth rate of 6.1-7.8% till 2030 on account of growing industrial and commercial activities as well as increasing demand from households. “It is important that private sector mining grows so that higher demand is met. Besides, this will also open up avenues for production of coal bed methane and other value added products, which will further strengthen the economy,” a top official explained.

Electricity generation is estimated to be around 2,451-2,742 billion units (BU) by FY30. The share of coal in domestic electricity generation has hovered around 71% in the last decade, which is likely to decline to 62% by FY30, translating to a coal demand ranging from 1,037 to 1,160 MT per annum (MTPA by FY30).