Mining and Minerals in India
Coal India and Commercial Coal Mining
How the state-owned Coal India became one of the world's largest coal producers, why India opened coal mining to private companies, and coal's future.
Coal India Limited, a public sector company created in 1975 after coal mines were nationalised in the early 1970s, is one of the world’s largest coal producers.
Why coal matters
Coal generates around 70 percent of India’s electricity. Despite rapid growth in renewables, coal demand has kept rising with electricity demand.
Coal India’s role
- It produces the majority of India’s coal.
- It employs lakhs of workers, directly and through contractors.
- It pays large dividends to the government.
Why open to private mining?
- Imports: India imported large amounts of coal despite big reserves, partly due to production shortfalls.
- Efficiency: competition could raise productivity.
- Energy security: more domestic coal reduces dependence on imports.
From 2020, commercial coal mining allowed private firms to mine and sell coal. India’s total coal production rose above 1 billion tonnes in 2023-24.
Challenges
- Quality: Indian coal often has high ash content.
- Pollution and health costs.
- Land acquisition and displacement.
- Climate commitments: India aims for net zero by 2070 and more renewable energy.
The future
Coal will remain important for years, but its share of electricity is expected to decline as renewables and storage grow. Coal regions face an eventual transition.
A power plant in Maharashtra relies on coal from Coal India's mines in central India, transported by rail. When supplies run short during a heatwave, electricity shortages follow, prompting pressure to boost domestic production.
Coal still supplies around 70 percent of electricity; the transition will take decades.
- Coal India, created in 1975, is one of the world's largest coal producers.
- Coal generates around 70 percent of India's electricity.
- Commercial coal mining opened to private firms from 2020.
- Production passed 1 billion tonnes in 2023-24, while the energy transition looms.
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