Potentialities of coal in India: a critical analysis

Coal with a long history of growth, is indispensable in our life and India's industrial economy is largely coalcentric. Its reserve in India is 234 billion tonnes as on I-I-2002 and its production during 2001-02 was 327.78 million tonnes. Presently, the demand for coal in India is mostly dependent on the production of steel, cement and power, together accounting for about 86% of the total demand. Based on the projections of production of these principal coal consuming industries, the 10th Plan Working Group has projected an annual coal demand of 448 million tonnes in 2006-07 against the possibility of an annual production of 400 million tonnes, thus leaving a substantial gap, which is likely to widen beyond 2006-07 as per the prognostication of demand. Qualitatively, Indian coal is of high ash. For reserve estimation up to 50% ash coal is considered. Even after taking the average ash content in the reserve as 30-35%, the effectively available reserve of coal may not exceed 130 billion tonnes out of the total estimated 234 billion tonnes, the balance being ash only. Even the coking coal which is generally perceived as good, contains 25-30% ash. Consistent with the reserves, bulk of the production of 327. 78 million tonnes is also of high ash coal. The status of coal washing in the country is also not encouraging, the quantity of washed coal being of the order of only 9 million tonnes. On the other hand, industries - particularly the thermal power which is by far the largest consumer of non-coking coal, are clamouring for lower and lower ash coal in order to mitigate the problems related to environment, space for ash disposal, transportation cost burden and boiler efficiency. Moreover, use of 34% and higher ash coal in powerhouses located at 1000 km or more distances from mines or in environmentally sensitive areas, has now been prohibited by the Government. Added to these, is the burden of ties and royalty. Thus, the adverse and ever widening demand supply gap is not only quantitative, but also qualitative. The final options for overcoming this problem are: (i) import of coal and (ii) opening up of coal mining to private sector with creation of commensurate washing capacity. In either case the added advantage will be increase in efficiency of mining and washing through exposure to competition.