Indian coal production to cross 1 billion tons by 2024
According to the Indian media on December 24, India’s Coal Minister Pralhad Joshi said on Wednesday that India’s coal production will break through 1 billion tons in the current financial year (FY 2023-24), and he is confident about it.
India has set a coal production target of 1,012.14 million tons for the 2023-24 fiscal year.
At the launch of the ninth round of commercial coal auctions, the minister said: “This year, we will cross 1 billion tons of coal production.”
In the current financial year, India expects coal demand to be 1,196.6 million tons. He said that India’s power demand will double and increase twofold by 2030, so coal production will have to increase accordingly to meet the country’s power demand for coal supply.
Thirty-one coal mines will be sold in the ninth round of commercial coal auctions. The auctioned coal mines are in four states – Jharkhand, Chhattisgarh, Madhya Pradesh and the southern state of Telangana. With the completion of the ninth round of auctions, the sale of 100 coal blocks will end.
India’s coal production is said to be 893 million tons in the fiscal year 2022-23. The Indian government has set ambitious growth targets for coal production, which it plans to increase to 1.4 billion tons per annum by 2027 and further increase total annual coal production to 1.58 billion tons by 2030.
India’s coal industry to buck the trend
While the growth in global coal production is gradually slowing down, India is setting itself apart from other countries by ambitiously and significantly increasing its production.
India is the world’s second-largest coal producer, producing 893 million tons in the fiscal year 2022-23 (ending March 31, 2023), up 14.8% from the previous year, which was up 8.7%. India accounts for over 10% of global coal production, second only to China.
Coal imports are critical for India, and they have been growing steadily. The Indian government has been working hard to reduce its dependence on coal imports and to realize a “self-reliant India.” Coal imports will account for 24% of India’s coal consumption in 2022, up from 12% in 2010. To achieve self-reliance, the government aims to increase domestic coal production to more than 1 billion tons by the fiscal year 2023-24 and to more than 1.5 billion tons by 2029-2030.
Coal-fired power generation remains a key element of India’s electricity production mix. Coal-fired power generation in India is projected to account for 72% of total power generation in 2023, which is likely to decrease slightly to 64% by 2030. In contrast, the global share of coal-fired generation in total power generation will likely be only 27% by that time.
Although India pledged to “phase down coal” at the COP26 Global Climate Forum in Glasgow in 2021, this does not mean that overall coal demand will decrease. India’s total coal demand is projected to rise from around 1.1 billion tons in 2022-23 to more than 1.6 billion tons in 2029-30, with power generation accounting for two-thirds of the total. By 2030, India’s share in global coal-fired power generation is expected to jump to 18% from 13% in 2023.
Coal use in India’s steel sector is also growing and, like the power sector, is more dependent on imports.
India’s metallurgical coal production in 2022-23 was 60.77 million tons or 7% of total coal production. The demand for metallurgical coal is almost double this figure. India’s steel industry is one of the fastest-growing in the world. It has become the second-largest steel producer after China, with India’s crude steel production reaching 124.7 million tons in 2022, according to the World Steel Association (WSA). It is also the only one of the world’s top nine steel producers to achieve growth in 2022, up 5.5% from the previous year. It also plans to increase its steel production capacity from 150 million tons in 2023 to 300 million tons by 2030.
