Coal Production

Coal is one of the primary sources of energy, accounting for about 67% of the total energy consumption in the country. India has some of the largest reserves of coal in the world. Indian coal has high ash content and low calorific value. However, with the present rate of around 0.8 million tons average daily coal extraction in the country, the reserves are likely to last over a 100 years. The energy derived from coal in India is about twice that of energy derived from oil, as against the world, where energy derived from coal is about 30% lower than energy derived from oil.

Production of coal grew at a rate of 6.4% per annum during the eighties. Following the nationalization of coal in the early seventies, production of coking coal increased at 4.2% per annum. This growth accelerated to 5.4% during the eighties. Similarly non-coking coal production, has grown from 4.7% per annum in the seventies to 6.7% per annum in the eighties.

One of the major constraints on the profitability of the coal sector is the low productivity in the underground mines. In order to encourage private investment, the Coal Mines (Nationalization) Act 1973, was amended with effect from June 9, 1993 for allowing private sector operation of captive coal mines by companies engaged in production of iron and steel, power generation and washing of coal.