Impending Crisis :

Combating India's Shortage of Coal

August 10, 2013  |  By T.S.Ram Karthe, India

Impending Crisis :

Photo : Dorin Jannotta/ sxc.hu

India produces much of the needed commercial power, almost 55% from coal. As per the Government's estimate, the coal shortage in India is likely to touch 15 per cent to 81 million tonnes (mt) by the end of the current plan period ending March 2012.

One of the main reasons leading to this can be attributed to the floods in Orissa, which struck the Singireni coal mines and have adversely affected the coal production, with a number of power plants having coal stocks in less than a week. Coal India Limited has been the sole player in the mining of coal, whose target fell short to 176 million tonnes (mt) from 197 million tonnes (mt). The thermal plants were asked to import costly coal, which could eventually take a tail spin in the profitability of the firms.

India has huge reserves of coal, approximately around 250 billion tonnes. Due to high ash content and low calorific value, thermal power plants in India prefer to import coal. For example, the calorific value of Indonesian coal is around 630KJ/kg. This is high when compared to Indian coal, where the calorific value is around 450kJ/kg. Though additional coal blocks were allotted in the 11th five year plan, quite a few of them remained idle, thereby causing a repercussion in the Thermal sector which India is presently facing. During the period of Jai Ram Ganesh, the Environmental Minister, a number of blocks were declared as go-zone and no-zone blocks, thereby preventing the players from developing captive coal mines.

The thermal power plants have to be given a tax concession for using minimum of 70% Indian coal in their operations. The high ash content should be addressed by investing in Research and Development (R& D), so as to develop subsidiary products from the ash generated. It should be made mandatory for all mining companies to spend 5% - 8% of their profits in R&D. Competition should be injected by allowing private players to develop and operate coal mines. This also enables Coal India Limited (CIL), an organized state owned Coal Mining Corporation which came into being in November 1975, to handle its operations more efficiently. A council must be established to tackle the issues and it must be one which stresses on abiding by the Mining Regulation Act, 1973. In order to increase the efficiency of thermal power plants, they should be allowed to blend with imported coal, thereby reducing the pressure on coal mines in India and at the same time, checking imports.

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