The Economic Importance of Coal in India

In India, coal mining probably started in 1774 during British colonial authority, once coal deposits around the Damodar River were discovered. However, limited supply and transportation issues hindered the output in subsequent decades. The advent of rail infrastructure helped alleviate some of this. During the two World Wars, coal output increased as Britain exported significant amounts to fund its troops. As a result, coal production was pushed through five-year plans after independence. The coal mine management company Coal India Limited was incorporated in 1975. However, it was modified in 2015 when the new government began allowing private companies to mine commercially. In India, coal is divided into two categories: non-coking and coking. Let us understand the economic importance of coal in India.

The Uses of Coal

Coal represents a staple of energy sources and serves a variety of purposes, including:

Coal as a Steam Energy Source

Since the Industrial Revolution, coal has been the key source of thermal energy. The majority of the machinery at the time was powered by coal. Coal was the only source of energy for railroad engines and marine engines. Coal was also employed as a transportation fuel in factory boilers.

Coke for Metallurgy

In the iron and steel industries, coke is essential. Because massive amounts of coal were necessary for the mills, the site of iron and steel facilities was formerly directed by the availability of coal mines. However, given the considerable electricity consumption in replacing coal, coal plays a significant role in many steel-based sectors.

Coal as an Electrical Energy Solution

Coal generates thermal power in emerging countries. In addition, coal gas is commonly utilised to create energy. Thermal electricity production is the most significant of the numerous coal applications, accounting for roughly 65% of global coal usage. Low-quality coal, particularly lignite, is utilised for electricity production and multifunctional industrial complexes.

Raw Material for Industry

Chemical industries rely on coal for a variety of essential ingredients. Benzole, coal gas, creosote, ammonia sulphate, coal tar, and other chemical raw materials are crucial. 

The Social Impact of Coal Mining

Drilling, bombing, excavating, building road surfaces, transportation of HEMM or heavy earth moving machines, and other mining operations result in transitory air pollutants and dust. These pollutants have significant human and societal consequences by creating pollution levels and environmental impacts. Most mining operations districts are seriously contaminated, notably Dhanbad, Talcher, Jharsuguda, Korba, Angul, and Singrauli. Climate change is exacerbated by the discharge of GHG or greenhouse gas concentrations.  Mine explosions, widespread in Raniganj, Jharia, and other mining operations, aggravate the pollution problem and greenhouse gas emissions. Besides these, the social impact of coal includes land degradation, stress on water levels, deforestation, and the destruction of biodiversity.  

India’s Coal Industry

India needs to import about 213 million tonnes of coal, and some Indian corporations have purchased coal mines in other countries to secure a steady supply. However, India’s energy needs and fiscal health are harmed by its reliance on imported high-quality coal.

The worrying situation of the coal sector can be attributed to various factors:

• Environmental and forest clearances are being postponed. The Environment Ministry categorised ecologically vulnerable regions into No Go and Go zones, with mining prohibited entirely in No Go zones.
• Other permissions from the state and federal governments are also necessary.
• Insufficient technology
• The procedure of allocating resources was arbitrary, discretionary, and opaque.
• Land acquisition disputes
• There has been no evaluation of merit and no process for price determination of national wealth.
• For more than 40 years, PSU Coal India has been the only industrial mining company exhibiting monopolistic characteristics. However, the monopoly mining industry did not fulfil domestic consumption.
• Coal India’s low growth is indeed a source of worry.
• Because of tight regulatory concerns, coal plants have more significant operating and maintenance expenses.
• India’s electricity regulators do not update tariffs regularly to account for increased operating expenses due to regulation.
• The effectiveness of state pollution control boards in evaluating and ensuring compliance is questionable.
• The government has substantially financed India’s power generating expansion, with many coal power stations being built with colossal debt funding from state-owned banks. It demonstrates that overseas investment in coal-fired power plants in India has been minimal.

Conclusion 

Coal mining in India started in 1774 during British colonial authority. Due to low coal reserves, India needs to import about 213 million tonnes of coal, and some Indian corporations have purchased coal mines in other countries to secure a steady supply. Most Indian coal mining districts are seriously contaminated, particularly the districts of Dhanbad, Talcher, Jharsuguda, Korba, Angul, and Singrauli. Disputes in land acquisition, insufficient technology, extraordinary operating and maintenance expenses, and low growth in the coal sector are a few factors that contribute to the worrying condition of India’s coal industry.