Coal in India has been mined since 1774, and India is the second largest producer and consumer of coal in the world after China, mining in FY 2024-25. India imports around 15% of the coal it consumes. Due to demand-supply mismatch and poor quality with high-ash content, India imports coking coal to meet the shortage of domestic supply. State-owned Coal India had a monopoly on coal mining between its nationalisation in 1973 and 2018.
Most of the coal is burned to generate electricity and most electricity is generated by coal, but coal-fired power plants have been criticised for breaking environmental laws. The health and environmental impact of the coal industry is serious, and phasing out coal would have short-term health and environmental benefits greatly exceeding the costs. Electricity from new solar farms in India is cheaper than that generated by the country's existing coal plants.
History
The Indira Gandhi administration of India nationalized coal mining in phases – coking coal mines in 1971–72 and non-coking coal mines in 1973. With the enactment of the Coal Mines (Nationalization) Act, 1973, all coal mines in India were nationalized in May 1973. This policy was reversed by the Narendra Modi administration four decades later. In March 2015, the government permitted private companies to mine coal for use in their own cement, steel, power or aluminium plants. The Coking Coal Mines (Nationalization) Act, 1972 and the Coal Mines (Nationalization) Act, 1973 were repealed in January 2018. In the final step toward denationalization, in February 2018, the government permitted private firms to enter the commercial coal mining industry. Under the new policy, mines were auctioned to the firm offering the highest per tonne price. The move broke the monopoly over commercial mining that state-owned Coal India had enjoyed since nationalisation in 1973.
Pre-independence
Commercial exploitation of coal in India began in 1774 with John Sumner and Suetonius Grant Heatly of the East India Company in the Raniganj Coalfield along the Western bank of Damodar River. The growth of Indian coal mining remained slow for nearly a century due to low demand. Carr, Tagore and Company tried to establish themselves as the sole supplier of coal in the region. In 1843, Jeremiah Homfray’s mine at Naraincoory was taken over by Carr, Tagore and Company to form Bengal Coal Company. The British authorities were not happy with the near monopoly of Carr, Tagore and Company in the field of coal mining. Bengal’s industrial development started taking off, powered by Bengal Coal Company’s coal. After the formation of Bengal Coal Company, the coal industry started getting regularised.The introduction of steam locomotives increased coal production to an annual average of 1 million metric tons (1.1 million short tons) in 1853. By 1900, India produced 6.12 million metric tons (6.75 million short tons) of coal per year; by 1920, it produced 18 million metric tons (20 million short tons). During the First World War, coal production received a boost due to increased demand, but declined again in the early 1930s. Production reached a level of by 1942 and by 1946.
In the regions of British India known as Bengal, Bihar and Odisha, the many Indians pioneered Indian involvement in coal mining from 1894. They broke the previous monopolies held by British and other Europeans, establishing many collieries at locations such as Khas Jharia, Jamadoba, Balihari, Tisra, Katrasgarh, Kailudih, Kusunda, Govindpur, Sijua, Sijhua, Loyabad, Dhansar, Bhuli, Bermo, Mugma, Chasnala-Bokaro, Bugatdih, Putki, Chirkunda, Bhowrah, Sinidih, Kendwadih, and Dumka.Diary of Golden Days at Jharia – A Memoir and History of Gurjar Kashtriya Samaj of Kutch in Coalfields of Jharia – written by Natwarlal Devram Jethwa of Calcutta (1998).
Seth Khora Ramji Chawda of Kutch was the first Indian to break the British monopoly in the Jharia Coalfields.Encyclopedia of Bengal, Bihar and Orissa by British Authority (1920) Natwarlal Devram Jethwa says that Other Indian communities followed the example of him in the Dhanbad-Jharia-Bokaro fields after the 1930s. These included the Punjabis, Kutchis, Marwaris, Gujaratis, Bengalis and Hindustanis.India at a Glance: A comprehensive reference book on India by T. V. Rama Rao, G. D. Binani. Published by Orient Longmans in 1954 (Coal Mines Section)Indigenous Enterprise in the Indian Coal Mining Industry c. 1835–1939, C.P. Simmons. Published in 1976.Report on the production and consumption of coal in India of 1921 India. Dept. of Statistics (Superintendent Government Printing, 1921 – Technology and Engineering).
Post-independence
Following independence, the Government of India introduced several 5-year development plans. Annual production rose to at the beginning of the First Five Year Plan. The National Coal Development Corporation (NCDC), a Government of India Undertaking, was established in 1956 with the collieries owned by the railways. The NCDC aimed to increase coal production efficiently by systematic and scientific development of the coal industry. The Singareni Collieries Company Ltd. (SCCL) which was already in operation since 1945 and which became a Government company under the control of Government of Andhra Pradesh in 1956. The coal industry in India was thus controlled by state-owned companies in the 1950s. Today, SCCL is a joint undertaking of Government of Telangana and Government of India sharing its equity in 51:49 ratio.
Nationalisation of coal mines
Right from its genesis, the commercial coal mining in modern times in India has been dictated by the needs of the domestic consumption. India has abundant domestic reserves of coal. Most of these are in the states of Jharkhand, Odisha, West Bengal, Bihar, Chhattisgarh, Telangana and Madhya Pradesh. On account of the growing needs of the steel industry, a thrust had to be given on systematic exploitation of coking coal reserves in Jharia coalfield. Adequate capital investment to meet the burgeoning energy needs of the country was not forthcoming from the private coal mine owners.
Unscientific mining practices adopted by some of them and poor working conditions of labor in some of the private coal mines became matters of concern for the Government. On account of these reasons, the Central Government took a decision to nationalize the private coal mines. The nationalization was done in two phases, the first with the coking coal mines in 1971–72 and then with the non-coking coal mines in 1973. In October 1971, the Coking Coal Mines (Emergency Provisions) Act, 1971 provided for taking over in public interest of the management of coking coal mines and coke oven plants pending nationalization. This was followed by the Coking Coal Mines (Nationalization) Act, 1972 under which the coking coal mines and the coke oven plants other than those with the Tata Iron & Steel Company Limited and Indian Iron & Steel Company Limited, were nationalized on 1 May 1972 and brought under the Bharat Coking Coal Limited (BCCL), a new Central Government Undertaking. Another enactment, namely the Coal Mines (Taking Over of Management) Act, 1973, extended the right of the Government of India to take over the management of the coking and non-coking coal mines in seven States including the coking coal mines taken over in 1971. This was followed by the nationalization of all these mines on 1 May 1973 with the enactment of the Coal Mines (Nationalization) Act, 1973 which determined the eligibility of coal mining in India.
All non-coking coal mines were nationalized in 1973 and placed under Coal Mines Authority of India. In 1975, Eastern Coalfields Limited, a subsidiary of Coal India Limited, was formed. It took over all the earlier private collieries in Raniganj Coalfield. Raniganj Coalfield covers an area of and has total coal reserves of . Eastern Coalfields puts the reserves at which makes it the second largest coalfield in the country (in terms of reserves).
The North East Indian states enjoys special privileges under constitution of India. The Sixth Schedule of constitution and article 371 of constitution allows state governments to formulate its own policy to recognize customary tribal laws. For example, Nagaland has its own coal policy which allows its natives to mine coal from their respective lands. Similarly, coal mining in Meghalaya was rampant till imposition of ban on coal mining by National Green Tribunal. The Nagaland Coal and Meghalaya Coal has large buyers in North India, Central India and Eastern India.
Denationalisation of coal mines Parliament enacted the Coal Mines (Special Provisions) Act, 2015 in March 2015 containing provisions enabling the government to allocate coal mines through auctions. The law also permitted private players to mine coal for use in their own cement, steel, power or aluminium plants. On 20 February 2018, the Cabinet Committee on Economic Affairs (CCEA) permitted private firms to enter the commercial coal mining industry in India. Under the new policy, mines will be auctioned to the firm offering the highest per tonne price. The move broke the monopoly over commercial mining that state-owned Coal India has enjoyed since nationalisation in 1973.
The Coking Coal Mines (Nationalization) Act, 1972 and the Coal Mines (Nationalization) Act, 1973 were repealed by the Repealing and Amending (Second) Act, 2017 on 8 January 2018.
Reserves
India has the fourth largest coal reserves in the world. , India had of the resource. The total reserves of coal rose 2.36% over the previous year, with the discovery of an estimated . About half of India's coal reserves are proven, 42% are indicated/probable, and 8% are inferred. Coal deposits are primarily found in eastern and south-central India. Jharkhand, Odisha, and Chhattisgarh accounted for almost 70% of the total known coal reserves in India.
The estimated total reserves of lignite coal were , remaining unchanged from the previous year. The largest lignite reserves are present in Tamil Nadu. Only about 16% of India's lignite reserves are proven, 56% are indicated/probable, and 28% are inferred.
The energy derived from coal in India is about twice that of the energy derived from oil, whereas worldwide, energy derived from coal is about 30% less than energy derived from oil.
Distribution of coal reserves by states
The following table shows the estimated coal reserves in India by state as of 1 April 2021.
State Coal reserves(in billion metric tonnes) Type of coalfield Jharkhand 86.217 Gondwana Odisha 84.878 Gondwana Chhattisgarh 73.424 Gondwana West Bengal 33.092 Gondwana Madhya Pradesh 30.217 Gondwana Telangana 22.851 Gondwana Maharashtra 12.936 Gondwana Bihar3.464 Gondwana Andhra Pradesh2.247 Gondwana Uttar Pradesh 1.062 Gondwana Meghalaya 0.576 Tertiary Assam 0.525 Tertiary Nagaland 0.446 Tertiary Sikkim 0.101 Gondwana Arunachal Pradesh 0.09 Tertiary India 352.13
Distribution of lignite reserves by states The following table shows the estimated lignite reserves in India by state as of 1 April 2021.
State Coal reserves(in billion metric tonnes) Tamil Nadu 36.490 Rajasthan 6.349 Gujarat 2.722 Puducherry 0.417 Jammu and Kashmir 0.028 Kerala 0.01 West Bengal 0.004 India 46.02
Production
India is the second largest producer of coal in the world, after China.Statistical Review of World Energy 2015 The production of coal was in 2024 and in 2020–21, a decline of 2.02% over the previous year primarily due to disruptions caused by the COVID-19 pandemic. The production of lignite was in 2020–21, a decrease of 13.04% over the previous fiscal. Production of coal grew by a compound annual growth rate (CAGR) of 3.19%, and production of lignite declined by a CAGR of 1.60% over the last 10 years. Coal mining is one of India's most dangerous jobs.
India targets to increase its coal production to by 2023–24.
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