The unemployed contract workers urged district collector to do possible effort to reinstate the work in the coal blocks.Coal industry is experiencing a slowdown all over the world. The slump in the coal industry will last longer than expected and the prices won’t improve until at least 2020, an economics professor at Central Queensland University, John Rolfe has warned. What happens to India’s coal reserves then, is the question!

India is in a peculiar position, being world’s third largest producer of coal and yet, not being able to fulfill its energy needs. This is primarily due to restricted mining marred with policy issues that have made domestic coal unviable and inaccessible.

The demand of coal in the country though, has always remained higher than its production. Coal, the most important and abundant fossil fuel in India, accounts for 55% of the country’s energy needs.

Indian power sector relies heavily on coal with about 78% of the total electricity being generated by it. But the irony is that despite there being large coal reserves lying unused in India, millions of tonnes of coal is imported every year! The reason again being bad policies and government’s inaction.

Mr. Brijesh Pant, an energy expert and an academician with JNU, says that providing electricity for 24 hours is on the government’s agenda, for which coal will have to be used. But the fact is that in areas where there have been regulatory issues, decisions on the use of coal have been pending for long. This is why thermal power plants have to import it from countries like Australia and Indonesia.

Efforts are being made that the government enables production of 1.5 billion tonnes of coal by 2020 and reduce imports of coal considerably from 2017 onwards.

But in the current scenario, Indian companies are stalling to make mines operational because it has become uneconomical, whereas imports are cheaper and easier to access.


Supreme Court cancelled licenses/allotments in 2014 considering allotment criteria to be arbitrary and filled with irregularities. New process of auctioning was initiated one year back. It was envisaged that after the auctions, the allotted mines would be functional. But fact of the matter is that while there were only few takers of coal, some others have moved the court, particularly those in the power sector, against the new conditions put in place by the government.

Even though process of auctioning is found to be more acceptable, auctioning has increased the cost and made mining unviable in many cases, considering the fall of coal prices internationally, said Ex-Coal Secretary Mr. Alok Perti.

Alok Perti also feels, since coal prices are falling all over the world, high prices in auction is making coal mines in India uneconomical, especially when the demand for coal power is low and there are not many takers for the coal mines.

Brijesh Pant feels that situation in India is different than in the US and Australia. He says, there is energy poverty in India. There are 30 to 40 percent people who don’t have any access to commercial power. If they are provided with it then the demand for coal will stay strong in the country.

So lack of demand for coal is not the issue in India. But if it is fulfilled by imports and not our own reserves, it will rationalize the price of coal in the country and can result in job losses. Since mines use lot of man power, drop in the production of coal will definitely affect employment in the coal sector as well. The threat of job cuts looms large on the coal industry.


Another step suggested by energy expert Brijesh Pant is that it is important, to invest in better techniques and advanced technology for mining. This will bring companies that require coal energy at a competitive and level playing field.

When new techniques are launched government will have to bring investment planner, to help private companies. Along with this labor will have to be trained for the new technique. It is required that private companies be made stock holders so that prices can be rationalized.

Currently more than 90 percent of the coal is produced by government-owned companies, Coal India Limited being one of the largest coal producing companies in the world. Government needs to work upon policies that give private sector companies a bigger share.

Ex-Coal Secretary, GoI, Alok Perti said, while coal will remain the main source of energy for India for another thirty or more years to come, it’s important for India to break the cycle of low manufacturing in order to make use of coal from Indian mines economically viable.

All signs show that the downturn in the coal industry will last longer than expected and prices won’t improve. To make domestic coal a viable option, breaking the cycle of low industrial and manufacturing growth is crucial. A lot also depends on whether coal prices are in accordance with the international prices or not.