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India has experienced a substantial rise in power demand over recent months. Private players are crucial in meeting this growing demand and exploring unexplored mines to maximize utility. Private players play a significant role in the expansion of power production, such as Adani Group in Chhattisgarh or Pinnacle Exploration Jharkhand.
India is third in the world for electricity production and consumption, according to data from India’s power ministry. The May month saw a 25% increase to 26.24 billion units (BU) over the same period last years.
To meet India’s increasing power needs, many new coal mining projects were initiated. Private companies like Adani Group Chhattisgarh or Pinnacle Exploration Jharkhand operate a variety of coal projects in these coal-rich states. Adani Group’s subsidiary CG Natural Resources received Khargaon coal mine, Chhattisgarh, against the highest offer of 6% share. Adani Group also received Jhigador with 250 million tonnes of geological resources. Since the 25 March auction of the second tranche commercial coal mines, private players have helped increase India’s coal production.
Private entities are able to meet India’s power needs, as coal makes up more than 2/3rds of India’s energy mix. Vedanta and Pinnacle Exploration have outperformed the state-owned companies like Coal India (CIL) and Coal India.
Hiltop Hirise Pvt Ltd and Dhansar Engineering Co. were potential bidders for Jharkhand’s mines. These companies have partially explored a mine with 84.03 million tonnes of geological resources.
The second tranche of the auction for commercial coal mining saw the announcement by the coal ministry that 19 mines were up to auction. Ten of the mines have been fully explored, and nine are still in development.
India’s installed energy capacity stood at 383.37GW as of May 31, 2021. India’s future power policy is to bridge the demand-supply gap. We have already begun to transition towards becoming carbon neutral and implementing renewable energy sources. Coal plays an important part in meeting growing power demand. The productivity of commercial coal auctions is increasing.
Bidders have been fiercely competing for blocks that were recently put up for auction by the Ministry of Coal. The technical bids received have been reviewed and published. The electronic auction for coal mines was initiated by the coal ministry.
In March this year, Nominated Authority Ministry of Coal began the auction process for 67 coal mines. The total number of coalmines that were successfully auctioned during the first tranche for auction for commercial mining was 20 of the total 38 mines.
India is working towards reducing the import substitution of coal. It is increasing domestic coal supplies to consumers, rationalizing coal movements, reviewing certain levies and incentivizing domestic coal consumption.
According to the Coal Ministry’s official data, India’s coal demand will rise from 955.26 MT 2019-20 to 1.27 BT 2023-24. A coal production blueprint has been prepared. The state-owned CIL is given the target of producing 1 BT coal in 2023-24 to meet the growing demand.
The net growth in thermal power capacity is expected to be 116.7 GW. It will increase to 350.9GW in 2030, from 234.2GW in 2020. Fitch Solutions highlighted the USD 3.1 Billion Yadadri Thermal Power Project (Telangana) and USD 3.6 Billion KSK Mahanadi Power Project (Chhattisgarh). Both the market and private sector are benefiting from coal projects. Adani Enterprises saw a 3% increase in its shares after it won the AdaniTalabira coal block bid. After winning the bid for the coal mines in Odisha, Jharkhand, Vedanta’s shares rose by 4.24% to 0.42%.
The coal industry has seen significant changes over the years. The government has recently introduced reforms to create a solid framework that will increase productivity and reduce environmental impact. There is also a strong focus on sustainability in mining operations.
