Table of Contents
The Indian coal industry is one of core industries in the country and is dominated by public sector undertakings, particularly Coal India Ltd. The industry involves coal and lignite mining, production and trading. Despite the presence of abundant resources, India has been facing persistent coal shortage in the last few years and has become a net importer of coal to meet its growing energy requirements. The Ministry of Coal allows production of coal from allocated coal blocks for some stipulated use only. Generally, companies in the power, steel and cement sectors own coal blocks in India. The coal mines are a property of the government and it has the sole right to mine and produce coal from it which sometimes results in inefficient use of available resources.
FY13 was a difficult year for the Indian coal industry owing to controversies surrounding coal blocks allocation scam. The supply of coal from domestic sources was not able to meet the huge demand for coal. In FY13, the demand for coal exceeded its supply by around 192 MT. The situation was more acute in the case of coking coal where the demand was nearly 1.5 times that of supply. However, the drop in demand for coal in China led to a decline in global coal prices during the fiscal year 2013 which made coking coal imports cheaper.
India’s growing energy requirements and rising per capita consumption, coupled with the reforms in land acquisition and environment clearances, bode well for the sector.
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