Coal India Ltd contributes 75% to the Overall Production
India presently ranks third in the world for the production of coal and fourth for maintains reserves of coal. Coal is believed to be the most available energy source in the country. This industry is a highly regulated by the Government characterizing a monopolistic nature.
Coal India Ltd, a public sector undertaking contributes nearly 70 % – 75 % to the overall production of coal in India. The sales figure stand is around Rs. 624 billion with a growth of 24 %. The other major players in the coal industry include Minerals and Metals Trading Corp. and Singareni Collieries Company. Coal India Limited and Singareni Collieries Company together accumulate for 90 % to 92 % of the total production n the country.
The different types of coal that are categorized under coal reserves of India include: prime coking, medium coking, and semi coking and non- coking. The poor quality of major concern as seen that non coking coal has a high content of ash that is around 80%.
As the year 2012 ends the Indian coal industry is estimated to be worth Rs. 800 billion with the production level reaching 540 million tons. Demand is seen majorly from the power industry, steel industry as well as the cement industry. Although production is plentiful the gap between demand and supply stood around 161 million tons in the year 2012. India has imported around 99 million tons of coal in this year. To remove the gap between demand and supply the Government is undertaking various measures to attract foreign direct investments, developing newer technologies, approval of products at a faster pace etc.
The main hurdle faced by the coal industry is the inability to meet the rising demand mainly due to the lack of public investments. The stringent rules and regulations of the government are also another factor that is affecting the coal industry mainly because it restricts the private undertakings. Poor infrastructure and transportation facilities are also affecting the distribution of coal to the different power plants within the country.
Attractive government incentives and mergers with foreign markets are expected to boost the overall production of coal in the country. By the year 2014 the industry is estimated to grow at a CAGR of around 9 %. To meet the needs of the domestic sector the government of India removed customs duty on coking coal to allow more imports into the country.