Coal Minister eyes 1.53 Billion Tons production, distance from Russian ventures
The Statesman | 24 June 2025
As India aims to scale up its non-conventional energy capacity from the current 220.10 GW to 500 GW by 2030, the Union Coal Minister declared, “Coal production will also peak at an estimated 1.53 billion tonnes by 2030.”
Although committed to gradually phasing out fossil fuel dependency as part of its strategic energy transition, the country continues to emphasise coal extraction in the near term to maintain healthy stock levels and bolster import substitution. Indian thermal power plants remain heavily reliant on low-ash foreign coal, primarily from Indonesia—this persistent dependence often props up Coal India Ltd’s (CIL) falling stock market performance.
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In March, India posted a record coal production of 1.04 billion tonnes. Coal continues to be the linchpin of India’s energy security framework. After visiting CIL’s profit-sharing mechanised mines at Jhanjra and Sonepur-Bazari under Eastern Coalfields Ltd (ECL), Coal Minister G. Kishan Reddy stated, “We supply 74 percent of the coal required by India’s energy sector, and this will continue as we work towards meeting our ambitious 2030 production target.”
Amid global uncertainty and surging energy demands, recent reforms have made coal block allocations more transparent. The Ministry now permits 100 percent commercial use of loss-making or abandoned underground mines by removing end-use restrictions. Last week, the Ministry allocated 23 new coal blocks. Reddy said, “The revised policy has made allocations more transparent and has driven momentum for capacity addition.”
This shift is seen as a decisive move towards full import substitution in the coming years. During FY 2024–25, India reduced its coal import dependence by 8.4 percent, saving foreign exchange worth ₹42,315.70 crore. However, CIL continues to grapple with underperformance, with workforce productivity at 1.2 million tonnes per man per shift—well below the global benchmark. India’s coal reserves currently stand at 387.21 million tonnes, according to senior CIL officials.
CIL had earlier set its sights on operating mines overseas to cut import reliance, but its venture in Mozambique proved unsuccessful. The two coal blocks acquired there were relinquished in 2016 due to poor-quality coal.
Meanwhile, the country’s Maharatna PSU signed two MoUs on 4 September 2019 with Russian firms—Far East Mining Company and Vostok Coal Project—to explore opportunities for acquiring coking coal assets in Russia. However, the ongoing war has stalled progress. The Minister remarked, “There are no immediate plans to proceed.” The MoU had been signed by former CIL Chairman Anil Jha and Lenoid Gennadievich Petukhov, Director General of Far East Mining Company.
Owing to sluggish offtake, rising pit-head inventories, and delayed environmental clearances, brokerage firms have revised sales volume expectations for CIL shares. Growth forecasts have been slashed from 3 percent to 1 percent for 2025, and from 5 percent to 4 percent for 2026. The Minister concluded, “This is not a challenge unique to CIL; it’s a global crisis.”