Coal India to open big, new mine this year to fight power crisis

Worker shovels coal in a supply truck at a yard on the outskirts of Ahmedabad
A worker shovels coal in a supply truck at a yard on the outskirts of Ahmedabad, India, October 25, 2018. REUTERS/Amit Dave

NEW DELHI/BHUBANESWAR, May 24 (Reuters) - State-run Coal India (COAL.NS) will open this year what is expected to become one of the country's biggest coal mines, officials said, as India struggles to keep pace with surging power demand.

Output from the new Siarmal mine in eastern Odisha state would rise gradually, reaching capacity of 50 million tonnes in about five to seven years, Vinayak Jamwal, spokesman for Coal India unit Mahanadi Coalfields (MCL), told Reuters.

Production would initially start in the October to December quarter at an annualised rate of about 2 million to 5 million tonnes, Jamwal said.

Coal India's record production has been brightspot in efforts to end India's worst power crisis in more than six years, as a heatwave has driven up demand for power and forced the government to reverse a policy on cutting coal imports.

India, which also plans to reopen closed mines to deal with the crisis, has not said how the drive for more coal would hit the country's emissions targets but it has repeated that it plans to install 450 gigawatts (GW) of renewable energy by 2030.

India now has total electricity generation capacity of 401 GW, of which 111.4 GW is renewable power.

Jamwal said work was proceeding on infrastructure for Siarmal, an open cast mine built in a partly forested area.

No Indian mine has produced more than 50 million tonnes of coal in a year. The Gevra coal mine, India's largest, aims to produce 52 million tonnes this year.

Coal India plans to open two more mines with combined annual capacity of 7 million tonnes in the financial year to March 2023, officials said, adding that plans to open seven new mines this financial year were unlikely to be achieved.

At a time when power use is growing at its fastest rate in about four decades, the state-run railway has struggled to deliver enough coal to utilities, leaving them with their lowest pre-summer inventory levels in at least nine years.

Coal India, which accounts for 80% of India's domestic output, plans to produce 700 million tonnes of coal in 2022 and aims to hit annual output of 1 billion tonnes by 2025.

Reporting by Sudarshan Varadhan; Additional reporting by Nupur Anand; Editing by Edmund Blair

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Sudarshan currently reports on the evolving energy landscape in Asia, as the region tries to strike a balance between ensuring reliable electricity supply and fighting climate change. In his previous avatar, he reported on sanctions-era global trade, human rights violations, labor movements, environmental offences and natural disasters in India for six years. During his nine years as a Reuters correspondent, he has attempted to lend a global perspective to small-town issues. Contact: +91 9810393152