A milestone: India's coal output crosses a billion tonnes in 2024-25

The Union government had earlier projected coal production to reach 1 bt by FY24, but it was later pushed to FY25

In a significant milestone, India crossed the record annual coal output of 1 billion tonnes (bt) on Thursday to hit 1.03 bt, constituting a 5.24 per cent uptick over the total production of 953.3 million tonnes in 2023-24.  

 

The landmark that comes days ahead of this financial year’s end, was driven by a 1.3 per cent rise in Coal India’s output, albeit on a large base, along with a substantive 29 per cent growth in the production of the energy-laden sedimentary rock by privately owned captive and commercial coal mines.

 

While Coal India Limited (CIL) has contributed 0.75 bt to the coal kitty so far this year, private mines have produced 0.18 bt. 

 

The balance came from Singareni Collieries Co Ltd, a joint venture owned by the Telangana government and the Centre, whose output is about 2.7 per cent lower than last year.

 

India is the second largest producer of coal after China, and relies on it to meet nearly 75 per cent of its electricity demand. India also imports high grade coal from countries like Indonesia and Australia, that is not locally mined, and is vital for blending with domestic coal to improve efficiency, as well as for running imported thermal power plants. 

 

The increased domestic output has also meant that India’s coal imports declined by 8.4 per cent between April and December 2024, resulting in forex savings of around $5.43 billion compared to the same period of last year, the Union Coal Ministry said in a statement.

 

The record production reflects the government’s strategic reforms and policies, such as amendments to the Mines and Minerals (Development and Regulation) Act, and the opening of the coal sector to private players through the commercial auctioning of coal blocks, the ministry said.  

 

Coal mines were awarded to private companies and state-owned utilities over the last nine years, after the Supreme Court, in 2014, had cancelled all coal block allocations made over the previous two decades. From 2021 onwards, the coal ministry opened up the coal mining sector for private players for merchant sales as well, as opposed to limiting mineral auctions to end-user industries like power plants.

 

“This achievement is not just about coal production; it is a crucial step towards ensuring long-term energy security and propelling India’s overall development. By embracing advanced mining techniques, optimizing logistics, and promoting sustainable practices, the coal sector is playing a central role in strengthening India’s energy infrastructure and bolstering economic resilience,” the coal ministry statement emhasised. 

 

“With cutting-edge technologies and efficient methods, we’ve not only increased production but also ensured sustainable and responsible mining. This achievement will fuel our increasing power demands, drive economic growth, and ensure a brighter future for every Indian,” said Union Coal and Mines Minister G Kishan Reddy wrote on his social media handles.

 

While there was a demand-supply mismatch in the post Covid years, coal production has jumped during the last two years owing to high production by CIL, and increased output from privately-owned mines.

 

“Breaching 1 Billion Tonne coal production is truly a significant milestone. With coal spearheading the country’s energy sector, increased indigenous output is a major step towards self-reliance. CIL is proud of its role in this achievement under the guidance of Hon'ble PM and the aegis of the country’s coal ministry,” CIL said in a written statement to Business Standard.