Indigenous Manufacturing and Self-reliance in the Coal sector

The Ministry of Coal (MoC) is committed to advancing the Make in India agenda in the coal mining sector, in line with the government’s vision of Atma Nirbhar Bharat. Recognizing the importance of indigenous manufacturing and self-reliance, the MoC has been actively collaborating with stakeholders to implement policies and initiatives that foster domestic production and innovation

It is heartening to note that there has been a reduction in the share of coal import in the total coal consumption in the country. The share of coal imports declined to 21% during April 2023 to January 2024, which was 22.48% during the corresponding period of previous year.

There has been a reduction of 36.69% in the volume of coal imported for blending by thermal power plants, amounting to 19.36 million tons (MT) during April 2023 to January 2024, in contrast to the same period of the previous year. This reduction in imported coal for blending signifies a shift towards utilizing domestic coal, thus reducing reliance on imports.

Conversely, there has been a notable increase of 94.21% in coal imports by imported coal-based power plants during April 2023 to January 2024, compared to the corresponding period in the previous year. As these power plants are designed based on imported coal only, the growth can be attributed to a substantial decline in import prices of coal during the aforementioned period. India primarily imports thermal coal from South Africa and Indonesia, and average prices from these countries decreased by approximately 54% and 38% respectively during April 2023 to January 2024, compared to the corresponding period in the previous year.

Furthermore, there has been a substantial reduction in the auction premium received by CIL, over the notified price of coal. It has decreased from 278% in the period from April 2022 to January 2023, to 82% during the same period in the fiscal year 2023-24. The reduction in auction premium is a testament to the ample availability of coal (currently 96 MT coal stock with coal companies) in the market.

It may be noted in this context that in collaboration with Coal India Ltd (CIL), the MoC has initiated several measures to promote indigenous manufacturing and support local suppliers. Domestic manufacturers are being given opportunities to showcase their capabilities through trial orders at CIL and contribute to the development of the coal mining sector. Trial tenders have been floated for various equipment, including wheel dozers, crawler dozers, motor graders, and tyre handlers, among others, providing opportunities for domestic manufacturers to participate and contribute to the growth of the sector.

Furthermore, the Ministry of Coal is working closely with CPSEs to streamline procurement procedures and provide incentives for domestic manufacturers. As part of this effort, relaxations in Security Deposit, Liquidated Damages, and Risk Purchase have been incorporated in trial orders, creating a conducive environment for the growth of new sources.

In addition, the Government has mandated Preferential Purchase Policy – Make in India (PPP-MII) guidelines issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in all tenders. This policy grants preference to Class-I Local Suppliers, further incentivizing domestic manufacturing and promoting self-reliance in the coal mining sector.

Currently, Coal India Limited possesses a fleet comprising 4,120 indigenous Heavy Earth Moving Machinery (HEMM) units of diverse types and capacities, out of a total fleet strength of 4,747. Looking ahead, projections indicate a tentative future requirement of indigenous HEMM within CIL to reach 19,035 units, against an overall requirement of 20,155 units.

The Ministry has mandated incorporating the following recommendations put forth by committees on Make in India initiatives, which have been implemented by Coal India Limited (CIL):

• Relaxed Minimum guaranteed availability for High-Capacity equipment in future trial tenders.

• Provenness criteria relaxations for indigenously manufacturing the same model being operated worldwide.

• Separate trial tenders for hiring newly developed indigenous Mass Production Technology (MPT) equipment without provenness in UG Mines with relaxation in clauses.

• Manufacturers have been provided the option to participate in the Revenue Sharing Model of Mine Development cum Operator (MDO) tenders in Open Cast (OC) Mines.

These measures underscore the government’s dedication to promoting indigenous manufacturing and self-reliance in the coal sector. Through collaborative efforts between the Ministry of Coal, with its CPSEs, and other stakeholders, the government aims to drive sustainable growth, foster innovation, and create employment opportunities in the coal mining sector, contributing to the nation’s economic development and self-sufficiency.