Mumbai, Nov. 10 -- Coal gasification projects could help India save around Rs. 1.5 tn in foreign exchange over the next five to seven years by replacing imports, Coal Ministry Secretary Vikram Dev Dutt said at the 4th Conference of Mining Ministers on Reforms in the Mines and Coal Sector in South Goa. The projects are also expected to support industrial diversification and regional development.
The Centre has committed financial incentives of Rs. 460 bn under two schemes to encourage coal gasification. The process converts coal into synthetic gas, or syngas, which can be used to manufacture methanol, ethanol and ammonium nitrate for explosives, as well as inputs for direct reduced iron-based steel production.
Odisha and Maharashtra have introduced incentive policies, with projects developing in clusters in Odisha's Angul district and Maharashtra's Chandrapur belt. Dutt urged coal-producing states, including Jharkhand, Chhattisgarh and Odisha, to create supportive policies to attract investment and ensure that central government incentives benefit resource-rich regions.
The projects require substantial initial capital and state-level support relating to electricity, water supply and taxation. Gasification plants could create employment in downstream industries, provide opportunities for skilled and semi-skilled workers, strengthen local supply chains and generate wider economic activity.
Dutt said commercial mining reforms introduced in 2020 had removed restrictions on the end use and sale of coal. A total of 137 mines had been allocated through 15 auction rounds, while captive and commercial mines accounted for around 20 per cent of India's coal production. The number of agencies authorised for mineral exploration had also increased from 13 government agencies to 57, including 44 accredited private agencies.
The secretary called for faster land acquisition, public hearings and statutory clearances to operationalise auctioned coal blocks. He said quicker production would help states receive royalties and other revenues earlier. The ministry has identified 147 mines for scientific closure over three years, with 43 already closed, and developed the SuVikalp digital tool to assess and repurpose closed mining areas.
Published by HT Digital Content Services with permission from Construction World.