Lok Sabha Question No. 1598 (UNSTARRED), answered on 2024-07-31
Subject: Self sufficent in Coal Production
Ministry: COAL
Asked by: Shri E T Mohammed Basheer, Shri Brijmohan Agrawal

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA UNSTARRED QUESTION NO.1598 TO BE ANSWERED ON 31.07.2024

## Self sufficent in Coal Production

1598 Shri Brijmohan Agrawal: Shri E T Mohammed Basheer:

## Will the Minister of COAL be pleased to state:

(a)  whether  it  is  a  fact  that  coal  is  not  produced  in  the  country  to  its  full  potential  and  is promoting imports, if so, the details thereof along with total coal production capacity and the steps taken to make the country self-sufficient in coal production and reduce imports;

(b) if so, the details thereof;

(c) whether the Government has introduced any legislation or amendments to streamline the self-reliant aim; and

(d) if so, the details thereof?

## ANSWER MINISTER OF COAL AND MINES (SHRI G. KISHAN REDDY)

(a)  &  (b): Most  of  the  requirement  of  coal  in  the  country  is  met  through  indigenous production and supply. The focus of the Government is on increasing the domestic production of coal and to eliminate non-essential import of coal in the country. The all-India domestic coal production  in  the  year  2023-2024  was  997.828  Million  Tonne  (MT)  (Provisional)  in comparison to 893.191 MT in the year 2022-2023 with the growth of about 11.71 %.  Further, in the current financial year (upto June'24), the country has produced 247.396 MT (Provisional) of coal as compared to 223.376 MT (provisional) during the same period of last year with a growth of about 10.75%. The steps taken by the Government to make the country self-sufficient in the production of coal are as under:

- i. Regular reviews by Ministry of Coal to expedite the development of coal blocks.
- ii. Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 [MMDR Act] for enabling captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market after meeting the requirement of the end use plant linked with the mine in such manner as  may  be  prescribed  by  the  Central  Government  on  payment  of  such  additional amount.
- iii. Single Window Clearance portal for the coal sector to speed up the operationalization of coal mines.
- iv. Project Monitoring Unit for hand-holding of coal block allottees for obtaining various approvals / clearances for early operationalization of coal mines.
- v. Auction  of  commercial  mining  on  revenue  sharing  basis  launched  in  2020.  Under commercial mining scheme, rebate of 50 % on final offer has been allowed for the

- quantity of coal produced earlier than scheduled date of production. Also, incentives on coal gasification or liquefaction (rebate of 50 % on final offer) have been granted.
- vi. Terms and conditions of commercial coal mining are very liberal with no restriction on utilization  of  coal,  allowing  new  companies  to  participate  in  the  bidding  process, reduced  upfront  amount,  adjustment  of  upfront  amount  against  monthly  payment, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% Foreign Direct Investment (FDI) through automatic route and revenue sharing model based on the National Coal Index

In addition to above, coal companies have also taken following steps to increase the domestic coal production:

- i. Coal  India  Limited  (CIL)  has  adopted  number  of  measures  to  increase  in  coal production.  In  its  Underground  (UG)  mines,  CIL  is  adopting  Mass  Production Technologies (MPT), mainly with Continuous Miners (CMs), wherever feasible. CIL has  also  planned  Highwalls  (HW)  mines  in  view  of  the  availability  of  Abandoned/ Discontinued mine. CIL is also planning large capacity UG mines wherever feasible. In its Opencast (OC) mines, CIL already has State-of-the- Art technology in its highcapacity Excavators, Dumpers and Surface Miners.
- ii. Regular liaison is being undertaken by Singareni Collieries Company Limited (SCCL) for grounding of new projects and operation of existing projects. SCCL has initiated action for developing infrastructure for evacuation of coal like CHPs, Crushers, Mobile Crushers, Pre-weigh-bins etc.

## Measures taken by the Government to substitute coal imports:

- i. The ACQ has been increased upto 100% of the normative requirement, in the cases where the ACQ was either reduced to 90% of normative requirement (non-coastal) or where the ACQ was reduced to 70% of normative requirement (coastal power plants). Increase in the ACQ would result in more domestic coal supplies, thereby, reducing the import dependency.
- ii. Under the provisions of Para B (viii) (a) of SHAKTI Policy, coal linkage is provided for short term for sale of power generated through that linkage through any product in Power Exchanges or in short term through a transparent bidding process through DEEP portal. In addition, with the amendment to the Non-Regulated Sector (NRS) linkage auction policy introduced in 2020, the tenure of coking coal linkages in the NRS linkage auction has been revised for a period upto 30 years. The coal offered for short term to the Power Plants under the amended provisions of SHAKTI Policy as well as increase in the tenure of the coking coal linkages in the NRS linkage auction for a period upto 30 years is expected to have a positive impact towards coal imports substitution.
- iii. Government has decided in 2022 that the coal to meet the full PPA requirement of all the  existing  linkage  holders  of  Power  Sector  shall  be  made  available  by  the  coal companies. The decision of the Government of meeting the full PPA requirement of the linkage holders of the Power Sector shall reduce the dependence on the imports.
- iv. Government has approved creation of a new sub-sector under the NRS linkage auctions with the nomenclature of 'Steel using Coking coal through WDO route'. Creation of the new sub-sector with the assurance for long-term coal linkage to the Steel Sector from the  identified  mines  for  the  entire  term  of  the  contract  period  shall  increase  the availability of washed coking coal in the country and enhanced domestic coking coal consumption by the Steel Industry in the country, thereby reducing the coking coal

imports.  Further, Mission coking coal was also launched by the Government in FY 2022 to meet the domestic coking coal demand projected in the National Steel Policy 2017.

- v. An Inter - Ministerial Committee (IMC) has been constituted in the Ministry of Coal on 29.05.2020 for the purpose of coal import substitution. The Representatives from Ministry of Power, Ministry of Railways, Ministry of Shipping, Ministry of Commerce, Ministry of Steel, Ministry of Mines, Ministry of Micro, Small & Medium Enterprises (MSME), Department for Promotion of Industry & Internal Trade (DPIIT), Central Electricity  Authority  (CEA),  Coal  Companies  and  Ports  are  members  of  this  IMC. Eleven meetings of the IMC have been held so far. On the directions of the IMC, an Import Data System has been developed by Ministry of Coal to enable the Ministry to track the imports of coal. Efforts are taken to ensure more domestic supplies of coal.

(c) & (d): The following legislation/amendments have been made in making the country selfsufficient in coal production and reducing imports: -

1. Mineral Concession Rules (MCR), 1960 amended with a view to allowing sale of coal or lignite, on payment of additional amount, by the lessee of a captive mine up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine. The allowance for sale prescribed quantity of coal or lignite shall motivate the captive lessees to enhance the production from the captive mines.

2. Enactment of Mineral Laws (Amendment) Act, 2020 on 13.03.2020 to enable the following:
- i. Allocation of coal blocks for composite prospecting license-cum-mining lease, which will help in increasing of the inventory of coal blocks for allocation.
- ii. Provided flexibility to the Central Government in deciding the end use of Schedule-II and Schedule-III coal mines under the Coal Mines (Special Provisions) Act [CMSP Act].
- iii. Companies which do not possess any prior coal mining experience in India can now participate in auction of coal blocks.

Accordingly,  amendments  have  also  been  made  to  the  CMSP  Rules,  2014,  Coal  Block Allocation Rules, 2017 and MCR, 1960 in view of above amendments brought about in the Acts through the Mineral Laws (Amendment) Act, 2020.

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