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India aims to reopen discontinued coal mines; seeks private participation


CIL to offer 100 discontinued mines

Closed mines to run on revenue-sharing model

  • Author
  • Rituparna Nath    Pritish Raj
  • Editor
  • Adithya Ram
  • Commodity
  • Energy Coal Metals

India is looking to partner with private companies to restart mines that have previously been shut or had their production discontinued by state-run Coal India Ltd., or CIL, on a revenue sharing model, according to a coal ministry statement issued Feb. 24.

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The move, which has seen interest from top companies including Adani Enterprises, Tata Power, Essel Mining JSW and Jindal Steel, a stakeholders' consultation is likely to see increase in production, lower import dependence and bring relief to domestic coal shortage in the country.

"There are many mines which were discontinued/closed in the past by CIL due to several reasons and these could be reopened and productively brought into operation with the partnership of the private sector," the statement said.

CIL is looking to offer more than 100 such mines to the private sector on a revenue-sharing basis in due course of time, the ministry said.

CIL's production over April-December 2021 increased by 5.3% on the year to 413.60 million mt, according to data from the company's website.

India aims to increase its domestic coal production to 1.2 billion mt by 2023-24 to reduce imports and bridge the demand-supply gap, S&P Global Platts reported earlier. The government has rolled out a number of steps including the commercial auction of coal on a revenue share mechanism and single-window clearance to boost output and rolling auction. It also aims to add domestic production capacity through the approval of new projects and the expansion of those planned for the future.

CIL has also identified 15 projects with an expected annual output capacity of 160 million mt to boost production to 1 billion mt.

India's coal demand stood at 905.88 million mt in 2020-21, with domestic supply contributing 690.89 million mt and imports at 214.99 million mt, according to ministry data.