28 July 2025 | New Delhi
India is making big changes in the coal sector to make the country stronger in energy and reduce dependence on coal from other countries. The government has taken many steps to increase coal production, bring out valuable minerals from coal waste, and make coal distribution to power plants more efficient with the new SHAKTI Policy. Here’s everything you need to know in simple words:
India is Producing More Coal Than Ever
India has already produced more than 1 billion tonnes of coal in the year 2024–25. This is a big number and shows that India is working hard to produce enough coal within the country. The target is to produce 1.5 billion tonnes by 2029–30. Most of the coal India needs is now coming from inside the country.
The biggest coal producer, Coal India Limited (CIL), made over 781 million tonnes of coal this year. The government wants CIL alone to reach 1 billion tonnes by 2026–27. The production is increasing every year, and this means India is slowly reducing its need to import coal from outside.
Why Do We Import Coal?
We only import coal when it’s absolutely necessary, like for high-quality coal (called coking coal) that we don’t have in large amounts. But the government wants to reduce even this by increasing the production of local coal and using it more efficiently.
To reduce imports, the government has taken steps like:
- Allowing private companies to mine and sell coal.
- Giving permissions faster through a Single Window Clearance system.
- Changing rules to allow coal mine owners to sell extra coal.
- Letting foreign companies invest 100% in commercial coal mining.
How the Government is Helping Power Plants
To make sure that power plants don’t depend on imported coal, the government has increased the Annual Contracted Quantity (ACQ) of coal. This means coal companies will now supply more domestic coal to power companies.
A new rule now says that even Imported Coal Based (ICB) power plants can get Indian coal under the Revised SHAKTI Policy 2025.
Also, if a power plant has already bought 100% of its allowed coal under the earlier agreement (FSA), they can now get more coal under this new policy. This will help power producers meet their full coal requirement.
What is the Revised SHAKTI Policy 2025?
The SHAKTI Policy is a government policy to decide how coal is given to power plants. The new version, Revised SHAKTI Policy 2025, is simpler and more transparent.
Earlier, there were many different windows to apply for coal. Now, there are only two:
- Window I: Coal for central or state government power companies at a fixed price.
- Window II: Coal for any power producer at a price slightly above the fixed rate.
This makes it easier for power companies to get coal and helps increase coal mining in the country. It also means more money for the states where mining happens, which can be used for local development.
Rare Minerals Found in Coal Waste
India is now looking at coal waste as a new source of valuable minerals. Scientists have found rare earth elements (REE) in fly ash (the leftover ash after burning coal) and in the overburden (the soil and rocks removed while mining). These minerals are very important for making mobile phones, batteries, and solar panels.
For example:
- At the Singareni Thermal Power Plant, fly ash was found to have 400 parts per million (ppm) of rare earth elements.
- In Neyveli, fly ash had 2100 mg/kg of rare earth elements, which is very high.
- These include Yttrium and other lighter and heavier rare earth minerals.
The government has started a new project called National Critical Mineral Mission (NCMM), with ₹100 crore for research and pilot projects to recover these valuable elements from coal waste.
Research & Development is Underway
Coal India and other companies have started R&D projects to study how to extract these rare minerals efficiently and cheaply. Many research institutes like IIT Hyderabad, IMMT Bhubaneswar, and NFTDC Hyderabad are working on this with coal companies.
Some key points from the research:
- North Eastern coalfields have small amounts of rare earths but good amounts of Heavy REEs.
- Gondwana sediments in places like Singrauli are promising for future rare mineral extraction.
- New technology is being developed to extract these minerals using safe and cost-effective methods.
Why This All Matters
- India is reducing coal imports and becoming more self-reliant in energy.
- The government is making coal policies simpler and fairer.
- We are now looking at coal waste as a valuable resource for future industries like electronics and clean energy.
The Indian coal sector is changing fast. With higher coal production, better policies for distribution, and new ways to find useful minerals in coal waste, the country is moving toward energy independence. These steps will help reduce costs, protect the environment, and create new jobs and industries.
Source: PIB
