Coal India to restart 32 mines to meet power needs as clean energy stalls

India's coal giant revives old mines and plans new projects as renewable capacity falls short of surging consumption

State-run Coal India Ltd is reopening 32 defunct mines and preparing to launch up to five new greenfield projects this year. The move comes as India’s energy needs outpace the current capabilities of its renewable infrastructure, marking a pivot back to coal amid a widening gap between energy demand and clean power supply.

 

Coal India Chairman and Managing Director PM Prasad, in an interview with the Financial Times, said the mines, once considered unviable due to reliance on manual mining and outdated machinery, will now be revived through revenue-sharing agreements with private partners. At least six of these mines are expected to resume production in the financial year 2025-26.

 

India’s total energy consumption reached approximately 40.5 exajoules in 2023, with the industrial sector accounting for 49 per cent, followed by residential, transport, and other sectors. India’s primary energy consumption is projected to more than double by 2050.

 

“This is now happening,” Prasad confirmed, referring to the Coal Ministry’s December 2024 policy aimed at restoring closed mines to boost domestic supply and reduce coal imports. So far this year, tenders for 27 mines have been awarded, with five more in the pipeline. 

 

Clean energy progress lags

While India has ramped up solar and wind investments, renewable sources have yet to meet the scale and consistency required to support the country’s increasing energy consumption. Despite a $13 billion investment in clean energy last year, the amount falls far short of the $68 billion annual requirement needed to meet the 2030 target of 500 GW from green sources, according to research firm Ember.

 

Coal continues to underpin India’s energy mix, powering 74 per cent of electricity generation as of 2024. While government projections indicate this figure will fall to 55 per cent by 2030 and 27 per cent by 2047, coal remains a vital interim fuel for India.

 

Coal India currently operates 310 mines, supplying about 75 per cent of the country’s total coal needs. The company expects coal production to grow by 6-7 per cent annually, reaching 1.5 billion tonnes by 2030.

 

Peak coal by 2035, says Coal India

Prasad pressed that despite reopening mines, Coal India is still committed to India’s net-zero target by 2070.

“We will reach peak coal by 2035,” he said, suggesting that while coal remains critical for now, it will gradually cede ground to more sustainable energy sources over the next decade.

 

The revival of the sector comes at a time when international pressure is mounting on major economies to hasten the transition away from fossil fuels. However, energy demands in the world’s fastest-growing economy require it to prioritise energy security and affordability while investing steadily in renewables for the long term.

 

108 Cola India mines marked for final closure

Over the past decade, Coal India Limited (CIL) has identified a total of 299 coal mines as abandoned, discontinued, or closed. This includes 130 mines closed after 2009, encompassing the last ten years. However, the formal closure process has been notably slow. In a press statement last year, the central government said that a total of 108 mines have been marked for final closure and 20 for temporary closure by Coal India Ltd and SCCL, but only three have been formally closed under government guidelines as of early 2025.

 

The delay in formal closures is attributed to factors such as financial constraints, administrative hurdles, and the complex process of land reclamation and environmental rehabilitation. In response, the Ministry of Coal has introduced revised mine closure guidelines and established a centralised portal to monitor closure activities, aiming to streamline the process and ensure environmental and community welfare.