India's underground coal mining revival going slow

KOLKATA (miningweekly.com) - India’s plan for reversing falling coal production from underground mines has been hit by scarce resources, a shortage of equipment and fragmented coal blocks.

“There is definitely a thrust on increasing production from underground mines. But we are still trying to understand the issues and figure out how to go about it,” a senior official with Central Mine Planning and Design Institute Limited (CMPDIL), the consulting arm of Coal India Limited, said.

“The Coal Ministry has clearly laid down that the share of coal production from underground mines to total production, which has fallen from 16% to 8% over the last ten years, needed to be reversed. But the moot challenge was how,” he said.

“At the geological level, Indian underground coal blocks were not continuous and hence longwall technology mining implemented in earlier decades had failed,” he added.

One of the options suggested by CMPDIL was the merger of underground mines to ensure more contiguous coal panels, which would be more amenable to mechanised bord-and-pillar mining process. The mining consultant had proposed a fresh survey of underground coal mines to identify which held potential for mergers.

It was also pointed out that large-scale deployment of mechanisation at the underground mines was capital intensive and the government had so far failed to incentivise underground mining and ensure necessary capital accretion.

A year and a half ago, the Coal Ministry proposed a dual pricing regime, under which underground coal would be priced higher than production from opencast mines, thereby ensuring higher margins in case of the former, but the scheme was yet to see the light of day, the official said.

On the contrary, despite the ostensible goal of reviving underground mining, the government was permitting conversion of underground mines into opencast mines to achieve the goal of one-billion tonnes a year production by 2020, the official said.

The absence of domestic mining equipment manufacturing capacities was also forcing Indian coal miners to increasingly rely on overseas equipment suppliers with the resultant issues of higher costs and technology implementation and absorption.

The Coal Ministry had initiated dialogues with several countries, such as the US, Poland, Canada and China, seeking suppliers, but so far only Caterpillar, in the US had been successful in making inroads.

Over the past year, Singareni Collieries Company Limited, which operated the largest number of underground mines in the country, has been sourcing longwall mining equipment from Caterpillar, which had also set up a service centre in India to ensure after-sales and technology advisory services.