India’s coal sector during and after the pandemic

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Coal is considered a ‘black’ diamond. 7% of the world’s total coal reserves are in India.

Coal India Ltd. Is the world’s largest company by production. India is at 4th rank in having total coal reserves in the world. In spite of this, India used to import coal from other nations so, the government allowed private sectors to enter the market. Recently, 50 coal blocks were sold by the government to the private sector. Moreover, Covid-19 has impacted the demand for coal.

As per the report, the production of coal in 2020-21 reduced by 3.3% as compared to 2019-20. On 18th June 2020 coal sector got commercialized. Many changes were introduced to boost the coal mining sector in India during the pandemic.

The government introduced a new coal linkage policy (SHAKTI) as per this, the state’s coal requirement will be summed up and allocation will be made based on applicant’s needs, etc. by designated state-owned power distribution companies. Allocation to the private sector will be through auctions. An online coal clearance system has been introduced to get all clearances easily. It a single online platform for obtaining all clearances. Moreover, paperwork for increasing coal production has been reduced too.

Along with these, govt. has introduced coal gasification and coal liquefaction process for reducing pollution. UTTAM (Unlocking Transparency by Third Party Assessment of Mined coal) app has been launched for monitoring the quality of coals. CAMS(Coal Allocation Monitoring System) introduced to monitor the proper allocation of mines.

Despite all these reforms, imports of coal have not reduced much. In coal auctions also, global companies are not showing much interest. As per the Coal secretary M Nagaraju, Financial markets can be the reason for it as an investment in the coal sector is impacted.

As per the recent reports, the coal industry of India is going to invest in non-coal sectors. It plans to invest in renewable energy and clean coal technology, which can be considered a good step as coal emits 40% carbon dioxide and is harmful to the environment. Recently, Coal India Ltd. Also allowed buyers to export coals bought from e-auctions which can be again considered as a revolutionary move. Coal India Ltd. has a target of producing 1 billion tone coals by 2023-24.

It is expected that India’s coal demand will be restored in 2021. At last, India has to focus now on other renewable sources like solar, wind, etc., for power as they are environment friendly and will reduce India’s import demand for coal also. Besides, they are renewable unlike, coal. Along with that, It is expected that, due to private player’s entry into the sector, newer technology will be implemented which is again can prove favourable.

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