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India's actual demand for coal increased to 1233.86 Million Tonnes (MT) in 2023-24 from 1115.04 MT in 2022-23 as Most of the country's coal demand is met through indigenous production/supply. The domestic coal production has also increased with against of increased demand. In 2023-24, domestic coal production increased by 11.65% to reach 997.26 MT from 893.19 MT in 2022-23.
To meet future demand for coal through Indigenous sources and to reduce non-essential import of coal, domestic coal production is expected to grow by 6-7% annually in the next few years to reach about 1.5 billion tonnes by 2029-30
Considering the decline in the performance of the washeries of Coal India Limited and the burgeoning demand for washed coking coal in the Steel Sector, the Government has taken the route of monetization of the old washeries to enhance the washed coking coal capacity. In line with this, the Government has approved the creation of a new sub-sector under the Non-Regulated Sector linkage auctions with the nomenclature of ‘Steel using Coking coal through WDO route'. The creation of the new sub-sector with the assurance for long-term coal linkage from the identified mines for the entire term of the contract period shall lead to the monetisation of coking coal washeries, thereby increasing the availability of washed coking coal in the country. It is also expected that the new sub-sector will lead to enhanced domestic coking coal consumption in the country's steel industry.
To substitute the Import of Coking Coal, the current domestic blending of coking coal by the steel sector is to be increased from the present 10-12% to 30-35%. Accordingly, the Ministry of Coal launched Mission Coking Coal in FY22 to meet the domestic coking coal demand projected in National Steel Policy 2017. Following transformative measures taken by the Ministry of Coal under the ‘Atmanirbhar Bharat’ initiative of PM, domestic raw Coking Coal production will likely reach 140 MT by 2030.
The Government of India has approved a Financial Support Scheme with ₹8500 crore outlay as viability gap funding to promote the setting up of Coal/Lignite Gasification Projects for both PSUs and the private sector. The approved scheme covers projects under three categories and has a total incentive payout of ₹8500 crores.
Category I, with a provision of ₹4050 crores, is for Government PSUs. They can submit proposals for funding assistance, and three selected projects will receive a maximum grant of ₹1350 crores or 15% of project cost, whichever is lower than VGF.
Category II, with ₹3850 crores, is available to both private sector and government PSUs. The maximum grant is ₹1000 crores or 15% of project cost, whichever is lower, as VGF.
Category III allocates ₹600 crores for demonstration or small-scale projects with a maximum outlay per project of ₹100 crores or 15% of project cost, whichever is lower.
Union Minister of Coal and Mines Shri G. Kishan Reddy gave this information in a written reply in Rajya Sabha today.
Also Read : PM Modi unveils over ₹1,330 crore worth of projects Sampling and grading of coal at 427 mines completed; new grades to be applicable for FY24
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