Digging deeper: Coal India's 1-bn tonne target to spur mining in states

Just transition goals, ecological challenges in contrast to mining plans

National miner Coal India (CIL), which is targeting 1 billion tonne (bt) of coal production by 2025-26 (FY26), is set to push enhanced mining activity in mineral-rich states.

CIL has worked out a 52-mine plan for meeting the production target. Of these, 13 are new coal mines; the rest are expansions of existing ones.

Jharkhand leads the pack with 15 new mining projects, of which three are new; the rest are expansion of existing coal mines in the state. It is followed by Chhattisgarh — it will have eight new coal mine projects. Maharashtra and West Bengal will get seven new coal mining projects each.

The new coal mining projects CIL will take up have a peak-rated capacity (PRC) of 129 million tonnes (mt) per annum and will contribute 29.4 mt by FY26. The expansion of existing mines of CIL’s seven subsidiaries in eight states will contribute 241 mt by FY26. These 39 mines have a PRC of 315 mt.

The Ministry of Coal has set a 1-bt coal production target by the end of the current fiscal year (2023-24), on the back of enhanced private coal mining. Of the targeted 1 bt, CIL will produce 780 mt, while privately owned captive and commercial mines will contribute 162 mt; the balance by The Singareni Collieries Company.

Most of the new coal mining projects will reach their peak capacity by 2026-27. A handful by 2030. Speaking to Business Standard, Pramod Agrawal, chairman and managing director, CIL, had said, CIL — in a two-pronged approach — was pushing for capacity augmentation through the expansion of existing mines and operationalisation of greenfield projects.

“In pursuit of 1 bt, these will contribute incremental projected production of 102 mt in FY26. We have worked out year-wise production plans until 2026 for monitoring them closely. Mahanadi, South Eastern, and Central Coalfields will be significant contributors towards the challenging goal, with Mahanadi alone chipping in with 29 per cent towards the 1-bt plan,” he said.

Questions on just transition

The enhanced mining by CIL comes in the wake of increasing power demand in the country. This year, the power demand of the country is expected to touch 220 gigawatt — a historic high.

Fuelled by thermal power, the country’s electricity sector is still largely dependent on coal, notwithstanding strides in renewable energy generation. Currently, close to 75 per cent of India’s power demand is being met by thermal power generation.

As enhanced mining picks up in mineral-rich states, the question of the country’s energy transition and net-zero goal also comes up.

India has set 2070 as the target year for being a net-zero carbon economy and 2030 for meeting 50 per cent of its electricity demand from non-fossil fuel sources.

In coal-rich states, especially Jharkhand and Chhattisgarh, which have always been the hotbed of ecological issues arising from mining activities, the new employment-generating mines are a mix of good and bad news.

Laxmi Chauhan, an activist from Korba, Chhattisgarh, said the government’s move to increase coal production seems to benefit private miners, who have already invested in the sector.

“With international pressure on moving away from fossil fuels rising, the government wants to extract as much coal as it can now. The licensed capacity for coal mining is already more than twice the need. People end up paying for the inefficiency, corruption in financial, ecological, and health costs,” said Chauhan.

CIL is increasingly outsourcing its mining activity through the mine developer and operator mode. To open up coal mining to the private sector, the coal ministry has already awarded close to 133 coal mines with a PRC of 515 mt since 2015 to private companies. Of these, 27 have commenced production.

Sudiep Srivastava, a Bilaspur-based advocate and activist, said there is already surplus coal production in the country and the existing thermal power plants are not even running at full capacity.

“Although the government is giving mining contracts to private companies, they are also not adhering to the mandatory norms of pollution mitigation. The mandate to efficiently dispose of fly ash is also not strictly observed,” he added.

With existing mines being shut down by CIL and its subsidiaries, and new ones open, coal-rich state governments are now putting their focus on just transition, which aims at protecting the human resource and socio-economic impact of the energy transition.

Jharkhand has formed a just transition task force for the same. Sector experts said these states are also now increasingly ensuring tighter norms for coal mining.