The world’s third-largest coal producer scales up to meet future demand

by rajesh nath and ajmal fawad

India’s total coal output grew during fiscal year 2018 to 675 million metric tons (mt) from 663 million mt the previous year, an increase of 1.8%. Most of the country’s coal production (84%) originates from the collieries of Coal India Ltd. (CIL).

In addition to power generation, India also requires significant amounts of coal to produce steel and cement. To meet these needs and minimize imports, the government has placed domestic coal production on a fast track, setting a target of 1.5 billion mt by fiscal year 2020. The government has set a goal of 1 billion mt of coal production for CIL by fiscal year 2020, which would be 433 million mt more than the 567 million mt it produced in fiscal year 2017. In two years, the government hopes to double current coal production levels.

CIL has eight subsidiaries: Bharat Coking Coal Ltd., Central Coalfields Ltd., Eastern Coalfields Ltd., Western Coalfields Ltd., South Eastern Coalfields Ltd., Northern Coalfields Ltd., Mahanadi Coalfields Ltd., and Central Mine Planning & Design Institute Ltd. Other state coal holdings include Singareni Collieries Co. Ltd. (SCCL), Neyveli Lignite Corp. (NLC) and Mineral Development Corp.

SCCL is jointly owned by the government of Andhra Pradesh and government of India. The Singareni coal reserves stretch across 350 kilometers (km) of the Pranahita, Godavari Valley of Andhra Pradesh with a proven geological reserves aggregating to 8.791 billion mt. SCCL produced around 62 million mt of coal in fiscal year 2017. It has 47 mines, including 18 open-cast mines and 29 underground mines. To achieve the government’s target of 100 million mt by 2020, SCCL is planning to start 20 to 25 new mines.

Coal Project Pipeline

CIL has 117 ongoing mining projects valued at Rs 200 million ($2.8 million) or more. Of that, 63 are on schedule. The largest projects include Kusmunda (50 million mt) and the Gevra expansion project (70 million mt).

An additional 129 new projects, with a targeted capacity of nearly 494 million mt have been identified, of which reports for 101 projects have been formulated. Out of these 101 projects, 30 projects with a capacity of 330 million mt have been approved.

During fiscal year 2018, six new coal mines came online: Aradhagram, Manoharpur, Gare Palma IV/8, Talaipalli, Dulanga and Pachwara North. Construction has started on a new coal handling plant at JVR open-cast mine, Sathupally in Khammam district. ALPS Coal Beneficiation Services will set up a coal washery at Chedra village in the Latehar district of Jharkhand. GPC plans to set up the Khadsaliya-I lignite mining unit at Khadsaliya, Lakhanka and Thalsar. Paras Power & Coal Beneficiation will set up a coal washery in Bilaspur, Chhattisgarh. MNH Shakti will set up a project in Sambalpur, Orissa.

South Eastern Coalfields Ltd., a CIL subsidiary, will establish the country’s largest coal washery with a capacity of 25 million mt per year (mtpy) in the Korba district of Chhattisgarh. The project would be known as Kusmunda coal washery. It will be an integral part of the Kusmunda open-cast coal mine, one of three mines operated by the SECL in Korba coalfields with estimated reserves of more than 10 billion mt.

CIL currently operates 15 washeries. Three non-coking coal washeries with feedstock capacity of 13.5 million mtpy and 12 coking coal washeries with feedstock capacity of 23.3 million mtpy. The company will set up 15 coal washeries in the next three years. Nine are thermal coal with a capacity of 94 million mtpy and six are coking coals with a capacity of 18.6 million mtpy.

CIL and Bharat Coking Coal Ltd. will set up 12 new coking coal washeries by fiscal year 2020. CIL is working to acquire coking coal assets, increase domestic production and minimize the diversion of coking coal to thermal plants. Coking coal imports could be reduced by 20%-25%.

During fiscal year 2018, CIL approved five open-cast projects with annual capacity of nearly 25 million mtpy and budgeted capital of Rs 42.6 billion ($600 million).

In SCCL, there are 20 mining projects (14 open-cast and six underground) valued at Rs 200 million ($2.8 million) and under various stages of implementation with capital costs of Rs 68 billion ($961 million). Of these projects, 14 are on schedule.

Several new mines are proposed to be opened in SCCL, including Bellampally OC-2, Kasipeta-2, Shant