Coal production from captive mines have recorded an impressive growth rate of 34.8% year-on-year in the first half of the current fiscal year, with these blocks producing 33.2 MT of the key fuel. Though captive coal still constitutes only 10.5% of the total domestic coal production, recent steps by the government such as allowing sale of 50% captive coal in the open market will likely encourage these miners to ramp up production further.
Captive coal production has seen a steady rise since the nadir hit in FY16 due to the Supreme Court’s cancelation of 214 blocks in 2014, following an adverse CAG report that highlighted arbitrariness in allocation. In April-September this fiscal, the coal production by captive mines maintained the accelerated pace gathered in recent years, while the country’s overall coal output (read production by Coal India and its subsidiaries) declined (see chart on Pg1). The trend would likely be accentuated in the second half of the year.
