Coal Mining In India

The relative economics of generation are changing: electricity from recently commissioned solar capacity in India is now cheaper than generation from many existing coal plants, shifting investment incentives. Institutionally, the sector was dominated by state-owned Coal India Limited after the 1973 nationalisation, a de facto monopoly that persisted until market reforms beginning in 2018 started to open the sector and alter competitive dynamics.

History

A coal mine in Dhanbad must be understood within a national legal and policy framework that was radically reshaped between the early 1970s and 2018. The Indian state moved to bring coal under public control in two phases: coking coal was nationalised in 1971–72 (formalised by the Coking Coal Mines (Nationalization) Act, 1972) and non‑coking coal followed in 1973, with the Coal Mines (Nationalization) Act, 1973 culminating in the formal transfer of ownership in May 1973. This process established state dominance in commercial coal production and, in practice, a single large public producer that controlled most market supply for decades.

The post‑1973 regime began to loosen only in the second decade of the twenty‑first century. In March 2015 the government authorised private firms to extract coal for captive consumption within their own industrial plants (notably cement, steel, power and aluminium), enabling large industrial users to secure domestic fuel supplies while leaving commercial sales largely within the public domain. A more consequential legal reversal occurred in January–February 2018: the two nationalisation statutes were repealed and private companies were permitted to undertake commercial coal mining. Allocation of mining rights was shifted from administrative assignment to competitive auction, with contracts awarded to bidders offering the highest per‑tonne price and thereby reintroducing explicit market pricing into access to reserves.

These sequential policy changes reconfigured the institutional geography of coal extraction. The shift from a centralised state monopoly toward competitive private participation alters incentives for investment, land use, local economic linkages and governance in mining districts such as Dhanbad, with implications for spatial patterns of development, environmental management and the distribution of rents from fossil‑fuel resources.

Pre‑independence: Coal mining in India

Commercial coal extraction in India began under the East India Company in 1774, when John Sumner and Suetonius Grant Heatly opened operations in the Raniganj Coalfield on the western bank of the Damodar River. For much of the nineteenth century production remained modest because domestic demand was low; the widespread adoption of steam locomotion catalysed a sharp rise in consumption, lifting annual output to about 1 million metric tons by 1853. Thereafter coal production followed a generally upward trajectory—reaching c. 6.12 million tonnes by 1900 and c. 18 million tonnes by 1920—punctuated by wartime spikes (World War I) and the interwar depression of the early 1930s. Output rose again during World War II to approximately 29 million tonnes in 1942 and about 30 million tonnes by 1946.

Spatially, the expansion of mining activity concentrated in British‑administered Bengal, Bihar and Odisha, where the growth of railway networks and rising industrial demand created opportunities for both European firms and indigenous entrepreneurs. From the 1890s onward Indian proprietors began to establish collieries across the Dhanbad‑Jharia‑Bokaro and adjacent districts, weakening the earlier European monopoly. A substantial number of Indian‑owned pits emerged—examples include Khas Jharia, Jamadoba, Katrasgarh, Loyabad, Govindpur, Sijua, Dhansar, Bhuli, Bermo, Chasnala‑Bokaro, Putki and Chirkunda—marking a broad geographic diffusion of indigenous enterprise within the major coal belts.

The linkage between transport infrastructure and mineral discovery is exemplified by the Jharia episode: the East Indian Railway’s 1894–95 extension from Barakar to Dhanbad (via Katras and Jharia) enabled access to previously remote seams and coincided with Seth Khora Ramji Chawda’s discovery of Jharia coal while engaged on railway works. His collieries (Jeenagora, Khas Jherria and Gareria) are documented in contemporary gazetteers (1917), providing archival confirmation that local actors leveraged railway contracts to enter coal production and to challenge colonial monopolies.

By the 1930s the social composition of mine owners and workers in the Dhanbad‑Jharia‑Bokaro area had become markedly heterogeneous. Migrant groups and mercantile communities—Punjabis, Kutchis, Marwaris, Gujaratis, Bengalis and Hindustanis—participated actively in ownership and labour, reflecting broader internal migration tied to extractive industry opportunities. The identification of the Singareni Coal Picking Belt in 1928 further attests to organized coal selection activities beyond the principal eastern fields, underscoring the multiplicity of discrete coal belts across the subcontinent.

In sum, pre‑independence coal development in India was driven by rising technological demand (notably rail traction), the expansion of railway infrastructure, wartime market cycles, and a progressive shift from European to diverse Indian ownership. These combined forces shaped the regional distribution and production milestones recorded between the mid‑nineteenth century and the mid‑twentieth century.

Post‑independence, India’s coal sector was integrated into the state‑led development framework established through successive Five‑Year Plans. Coal output expanded markedly at the outset of the First Five‑Year Plan, reaching approximately 33 million tonnes, reflecting the priority accorded to energy and heavy industry in centrally planned economic policy.

Institutional measures in the 1950s consolidated coal production under public ownership as part of a broader strategy of directed industrial development. In 1956 the National Coal Development Corporation (NCDC) was constituted as a Government of India undertaking, built around collieries formerly associated with the railways and charged with expanding output through systematic, scientific and efficient exploitation. The Singareni Collieries Company Ltd. (SCCL), which had been active since 1945, was converted into a government company in 1956 under the administrative control of the Government of Andhra Pradesh, exemplifying the transfer of key mining assets into state hands.

SCCL’s operational lineage extends earlier than its 1945 corporate inception: records such as the 1928 Singareni StruttPit attest to pre‑independence extraction in the Singareni field. Today SCCL remains a public‑sector enterprise, with ownership shared between the state (now Telangana) and the central government on a 51:49 basis, illustrating continuity in public ownership alongside subnational participation in coal governance.

Nationalisation of coal mines

India’s commercial coal industry developed principally to satisfy domestic energy and industrial demand, drawing on large reserves concentrated in Jharkhand, Odisha, West Bengal, Bihar, Chhattisgarh, Telangana and Madhya Pradesh. Rapid expansion of the steel sector, and its requirement for coking coal, focused systematic extraction in fields such as Jharia; however, private proprietors frequently lacked the capital and technical capacity to scale production or to modernize operations. Reports of unscientific mining methods and poor labor conditions in several private collieries provided the central government with the principal rationale for state intervention in the early 1970s.

Nationalisation occurred in two stages: the first targeted coking-coal operations and the second encompassed non‑coking mines. Legislative measures began with the Coking Coal Mines (Emergency Provisions) Act, 1971, which authorized temporary governmental takeover of management, and continued with the Coking Coal Mines (Nationalization) Act, 1972, which formally nationalized most coking coal mines and coke-oven plants (effective 1 May 1972) and transferred many assets to Bharat Coking Coal Limited (BCCL), excluding specified Tata and IISCO holdings. Subsequent statutes—the Coal Mines (Taking Over of Management) Act, 1973, and the Coal Mines (Nationalization) Act, 1973—extended government authority over coking and non‑coking mines across seven states, effected nationalization from 1 May 1973, and defined legal eligibility for coal mining in India.

After nationalization the non‑coking assets were placed under the Coal Mines Authority of India; in 1975 Eastern Coalfields Limited, as a subsidiary of Coal India Limited, assumed control of former private collieries in the Raniganj Coalfield. Raniganj covers approximately 443.5 km2 and is variously reported to hold some 8,553 million metric tons of coal in one source and 29,720 million metric tons by Eastern Coalfields Limited’s estimate—if the latter figure is authoritative, Raniganj ranks among India’s largest coalfields by reserves.

The constitutional position of the North‑East introduces important regional exceptions to the national framework: provisions such as the Sixth Schedule and Article 371 permit state governments to recognize customary tribal laws and to tailor resource‑management policies. This autonomy has produced divergent coal‑policies and outcomes—Nagaland authorizes native inhabitants to mine on their lands, while Meghalaya experienced extensive informal extraction until regulatory intervention by the National Green Tribunal—yet coal from these states continues to be traded to consumers in North, Central and Eastern India. These regional variations underline the interplay between nationalisation, local governance, and environmental and social regulation in India’s coal sector.

Between 2015 and early 2018 India implemented a tightly sequenced set of legal and policy reforms that dismantled the post‑1973 nationalised regime and introduced market mechanisms for allocating mining rights. The Coal Mines (Special Provisions) Act, 2015 established a statutory basis for awarding mines through competitive processes and permitted private firms to extract coal for their own industrial consumption. Subsequent statutory repeal of the Coking Coal Mines (Nationalization) Act, 1972 and the Coal Mines (Nationalization) Act, 1973 by the Repealing and Amending (Second) Act, 2017 (effective 8 January 2018) removed the earlier legal foundation for a state monopoly. Finally, on 20 February 2018 the Cabinet Committee on Economic Affairs authorised entry of private firms into commercial coal mining and set out an auction design in which mining leases are awarded to the bidder offering the highest per‑tonne price.

Collectively these measures shifted India’s coal governance from state dominance—exemplified by Coal India’s exclusive commercial role since nationalisation—toward a market‑oriented allocation regime. The reforms’ reliance on a per‑tonne bid metric and on allowing both captive and commercial private mining has direct geographic consequences: it alters where extraction is likely to occur, shapes patterns of firm entry and investment in coal provinces, and creates new demands on transport, processing and energy infrastructure in coal‑bearing regions.

Reserves

As of 1 April 2021 India’s coal endowment stood at 352.13 billion metric tons (388.16 billion short tons), placing the country fourth worldwide; this total rose by 2.36% year‑on‑year following the identification of an additional 8.11 billion metric tons (8.94 billion short tons). The national resource base exhibits heterogeneous geological certainty: roughly half of the coal inventory is classified as proven, about 42% as indicated/probable, and the remaining 8% as inferred, reflecting varying degrees of exploration and confidence across deposits.

Coal occurrences are strongly geographically clustered, with Jharkhand, Odisha and Chhattisgarh together accounting for nearly 70% of India’s known coal reserves, highlighting the eastern and south‑central regions as the principal coal provinces. Lignite (brown coal) is a separate component of the country’s fossil‑fuel resources, estimated at 46.02 billion metric tons (50.73 billion short tons) on the same assessment date; these lignite reserves were unchanged from the prior year and are concentrated principally in Tamil Nadu. Lignite exhibits markedly lower proven confidence than hard coal: only about 16% is proven, 56% is indicated/probable and 28% inferred, indicating a larger proportion of lignite resources that require further exploration to upgrade their classification.

In broader energy terms, domestic energy production from coal substantially exceeds that from oil—approximately double—whereas at the global scale coal’s reported energy contribution is described as about 30% less than oil; the latter comparative statement is noted here as reported but not accompanied by a cited source.

Distribution of Coal Reserves by State (as of 1 April 2021)

India’s assessed coal endowment totaled 352.13 billion metric tonnes on 1 April 2021. This resource base is overwhelmingly composed of Gondwana‑age deposits concentrated in central and eastern India, with a much smaller contribution from Tertiary coal in the northeast.

Jharkhand is the single largest holder of coal reserves, with 86.217 billion tonnes, and contains major mining complexes such as the Dhanbad mine area, which exemplifies the intensive coal‑mining landscape of the Gondwana domain. Odisha (84.878 billion tonnes) and Chhattisgarh (73.424 billion tonnes) closely follow, together forming the core of the contiguous Gondwana coal belt. Significant secondary Gondwana reservoirs include West Bengal (33.092 billion tonnes), Madhya Pradesh (30.217 billion tonnes), Telangana (22.851 billion tonnes) and Maharashtra (12.936 billion tonnes).

Smaller Gondwana occurrences are reported in Bihar (3.464 billion tonnes), Andhra Pradesh (2.247 billion tonnes), Uttar Pradesh (1.062 billion tonnes) and Sikkim (0.101 billion tonnes). By contrast, the Tertiary‑age provinces of the northeast account for only a minor share of national reserves: Meghalaya (0.576 billion tonnes), Assam (0.525 billion tonnes), Nagaland (0.446 billion tonnes) and Arunachal Pradesh (0.090 billion tonnes).

Overall, the spatial distribution underscores a clear dichotomy: India’s coal resource is dominated by extensive Gondwana deposits centered on Jharkhand, Odisha and Chhattisgarh and their adjoining states, whereas Tertiary deposits in the northeastern region contribute only a small fraction to the national total.

Distribution of lignite reserves by state (as of 1 April 2021)

India’s assessed lignite endowment totaled 46.02 billion metric tonnes. This resource base is highly spatially concentrated: Tamil Nadu alone holds 36.490 billion tonnes (≈79.27% of the national total) and is the single largest subnational repository. Rajasthan (6.349 billion tonnes, ≈13.79%) and Gujarat (2.722 billion tonnes, ≈5.92%) are the next largest holders; together these three states account for 45.561 billion tonnes, or roughly 99.00% of India’s lignite reserves.

The remaining listed units contain only a marginal share of the national total. Puducherry holds 0.417 billion tonnes (≈0.91%), Jammu and Kashmir 0.028 billion tonnes (≈0.06%), Kerala 0.010 billion tonnes (≈0.02%), and West Bengal 0.004 billion tonnes (≈0.01%); these four together amount to about 0.459 billion tonnes (≈1.00% of the country’s lignite). The observed distribution therefore reflects an extreme imbalance in resource location, with almost the entire lignite resource concentrated in a very small number of states—an outcome with direct consequences for regional energy planning, infrastructure allocation and resource governance.

Production

India is the world’s second-largest coal producer after China, with national output reaching approximately 1,000 million metric tons (1,100 million short tons) in 2024, underscoring its central role in the global fossil-fuel supply. Production dipped to 716.08 million metric tons (789.34 million short tons) in the 2020–21 fiscal year, a 2.02% contraction largely attributable to the demand and operational disruptions associated with the COVID‑19 pandemic. Policy objectives have sought to expand domestic supply, with a government target of about 1,200 million metric tons (1,300 million short tons) by 2023–24 to bolster energy security and industrial demand.

Longer-term trends show moderate growth in thermal coal but decline in lower-grade deposits: over the most recent decade coal production grew at a compound annual growth rate (CAGR) of 3.19%, whereas lignite production contracted at a CAGR of 1.60% over the same period. The 2020–21 lignite output of 36.61 million metric tons (40.36 million short tons) represented a sharper short‑term fall (13.04% year‑on‑year) than seen for overall coal. Coal extraction in India also carries pronounced occupational hazards—mining is widely regarded as one of the country’s most dangerous occupations—which has important implications for labor safety policy, regulatory oversight and the socio-economic geography of mining regions.

Washing

Coal washing is a beneficiation step in the coal production chain that physically removes ash and other impurities from mined coal to meet quality specifications for thermal uses, the principal aim being reduction of ash to permit direct feeding into industrial boilers (for example, those in steel plants). In India this processing is predominantly undertaken at standalone washeries located downstream of extraction rather than as an integral part of most mine sites, although a minority of washeries are co‑located with mining operations.

As of 31 March 2021 India operated 60 coal washeries—19 dedicated to coking coal and 41 to non‑coking coal—with a combined installed washing capacity of 138.58 million tonnes per year (29.98 Mt/yr coking; 108.60 Mt/yr non‑coking). The scale and configuration of this dedicated washing infrastructure shape the national coal value chain by dictating transport and logistical arrangements, influencing where industrial consumers (notably steel plants) locate relative to processing facilities, and determining regional patterns of coal movement and processing.

Consumption (2020–21)

In 2020–21 India consumed 906.08 million metric tons of coal (≈0.999 billion short tons), of which roughly four‑fifths (79.03%) was supplied by domestic mines. Aggregate coal use rose steadily over the preceding decade at a compound annual growth rate of 3.96%, reflecting persistent demand across power and industrial sectors. Despite large domestic output, India remained the world’s second‑largest coal importer (after China), importing 215.25 million metric tons in 2020–21 while exporting 2.95 million metric tons; net imports fell by 13.39% from the prior year but have expanded at an average annual rate of 8.62% over the last ten years, largely to meet quality specifications for particular industries.

The electricity sector dominated raw coal consumption, accounting for 64.07% of total use and thereby underscoring coal’s centrality to India’s power generation. Industrial consumption beyond power was concentrated in steel and washery operations (6.65%), with smaller shares going to sponge iron (1.06%), cement (0.75%), and fertilizers and chemicals (0.19%). Lignite—a lower‑grade, locally important fuel—amounted to 37.22 million metric tons in 2020–21, of which electricity generation consumed 84.46%. Other lignite users included the paper (5.55%), cement (2.18%), and textile (2.01%) sectors. Unlike thermal coal overall, lignite use declined over the prior decade (CAGR –1.30%), suggesting substitution, efficiency gains, or changes in fuel choice within the traditional lignite‑using industries.

Electricity generation

As of 2020–21 coal remained the principal fuel for electricity in India, supplying over 73% of generation; lignite accounted for an additional c. 3.6%. The power sector has long been the largest domestic consumer of coal, historically taking more than 70% of national output (reported for 2013). These shares underline the centrality of coal to India’s power system even as its economics and technical needs evolve.

Much of India’s coal is geologically Gondwana in type, which at a national scale is characterized by relatively low energy content (low gross calorific value, GCV), high ash and lower carbon concentration; concentrations of toxic trace elements in this coal are generally described as negligible. Average GCV for Indian coal is about 4,500 kcal/kg, substantially below the roughly 6,500 kcal/kg typical of higher‑grade coals exported from countries such as Australia. Because thermal plants must burn more mass of lower‑GCV coal to produce the same thermal input, Indian thermal generators consume more fuel per unit of electricity—on the order of 0.7 kg of coal per kWh—compared with about 0.45 kg/kWh in U.S. coal plants. These fuel quality factors raise both fuel use and operational costs for coal‑fired generation in India.

Concurrently, economic analyses indicate a rapid change in relative costs. A 2020 Carbon Tracker study found that a significant share of existing coal units were already uneconomic relative to building new renewable capacity (about 17% at the time) and projected that by 2025 a large majority (approximately 85%) of coal plants would be costlier than new wind and solar projects. Taken together, the technical limitations imposed by domestic coal quality and the improving cost competitiveness of variable renewables argue against extensive new coal construction.

Policy and operational responses proposed in light of these trends emphasize optimizing the existing coal fleet rather than expanding it. Recommended measures include retrofitting plants for greater operational flexibility and deploying them in complementary roles to variable wind and solar output, thereby supporting grid reliability while minimizing the need for additional baseload coal capacity. In sum, India’s energy geography—dominated by coal but constrained by fuel quality and facing rapidly falling renewable costs—favors investment in flexible use and modernization of current coal infrastructure alongside accelerated deployment of wind and solar, rather than large‑scale addition of new coal plants.

Coal gasification

Gasification converts solid carbonaceous materials—coal, lignite, petcoke and biomass—into a combustible synthesis gas predominantly composed of hydrogen (H2), carbon monoxide (CO) and carbon dioxide (CO2). This syngas serves as an intermediate: through catalytic, high‑pressure/medium‑temperature processes (notably Fischer–Tropsch–type chemistry) the H2/CO mixture can be transformed into a range of hydrocarbons, including synthetic natural gas (SNG) and liquid fuels.

Underground coal gasification (UCG) extends the technology to deep or otherwise uneconomic seams by producing gas in situ, thereby accessing reserves that are impractical to mine conventionally. In India, where coal resources are large and domestic natural gas supplies are constrained, coal‑to‑gas pathways are therefore promoted as strategic options to bolster gaseous fuel availability for industry and urban centres. The Dankuni complex illustrates such integration: centrally produced syngas is conveyed by pipeline to industrial users in the Kolkata region, demonstrating the feasibility of regional syngas distribution.

Existing coal‑based fertiliser plants present retrofit opportunities: many can be economically reconfigured to yield SNG by repurposing process units and taking advantage of close proximity to coal feedstock. Economic assessments suggest coal‑derived syngas can be cost‑competitive, with production cost estimates on the order of or below US$6 per MMBtu (roughly US$20/MWh), a benchmark for comparison with other gas supplies.

A principal constraint for India is the dominance of low‑rank coals and lignites, whose high moisture and reactivity profile limit their suitability as sole gasifier feedstocks. Practical responses include blending low‑rank coals with higher‑carbon materials such as petcoke to stabilize feedstock properties, and process designs that incorporate external hydrogen addition to enable conversion of low‑quality coal into SNG. These technical adaptations expand the range of exploitable domestic resources while improving the viability of coal‑to‑gas routes.

Health effects

The health impacts of India’s coal industry are significant and spatially concentrated; a note added in June 2020 flagged the need for expansion of this topic, reflecting ongoing gaps in documentation and research. Empirical evidence from a household survey near a coal mine reveals a pronounced proximity effect: 90% of households in a village adjacent to mining reported health problems within the previous year, compared with 52% of households in villages situated at least 40 km (25 mi) from a mine. Incidence of self-reported morbidity was highest in settlements immediately adjacent to mining, indicating a clear decline in reported health burden with increasing distance from mining activity.

Airborne emissions from coal combustion and associated industry operations are major causal agents. Fine and coarse particulate matter are the principal drivers of respiratory and cardiovascular harm, while sulfur dioxide (SO2) and nitrogen dioxide (NO2) from coal burning contribute additional respiratory irritation and systemic effects. Epidemiological and toxicological links connect these emissions to asthma exacerbation, chronic obstructive and other lung diseases, cardiovascular pathology, certain cancers, and neurological outcomes; at the same time, these pollutants play roles in acid deposition and climate forcing, extending ecological and public-health consequences beyond local zones.

A separate but related exposure pathway arises from coal ash, the solid residue of combustion. Coal ash can contaminate soil and water and create direct contact and inhalation risks distinct from airborne combustion emissions, thereby affecting community health through multiple media.

Taken together, the spatially concentrated self-reported morbidity near mines, the dominant health risks posed by particulate matter plus SO2 and NO2 emissions, and the additional hazards of coal ash indicate that India’s coal sector generates layered health impacts operating at local, regional, and global scales. These multi-scalar effects underscore the need for integrated geographic–health assessments to inform mitigation and policy.

Environmental effects

The century‑long underground fire at Jharia Coalfield exemplifies the acute and persistent environmental hazards associated with in situ coal combustion. The blaze, which has emitted continuous smoke and visible embers and had by August 2020 displaced or endangered the health of hundreds of thousands of residents, produces a suite of geophysical risks—ground subsidence, uncontrolled combustion, and chronic emissions—that degrade air quality, contaminate soils, elevate local temperatures, and threaten built infrastructure. These processes generate long‑term public‑health emergencies and large‑scale population movements that compound the social and economic burdens on affected localities.

At the policy and market levels, international actors and recent cost trends have increased pressure to curb coal expansion. In 2020 the UN Secretary‑General publicly urged India to halt new coal‑fired power stations and to eliminate fossil‑fuel subsidies, framing coal rollback as an urgent global priority. Complementing this policy imperative, BloombergNEF’s analysis indicates that—when subsidies are excluded—the levelized cost of electricity (LCOE) from new utility‑scale solar has been lower than that of existing coal plants since 2021, demonstrating a market‑based cost advantage for new solar generation.

Taken together, the localized environmental, health and social damages evidenced by Jharia, the international policy exhortations, and the emerging economic competitiveness of large‑scale solar strengthen the geographic case for transitioning energy systems away from coal at both regional and national scales.

Coal mafia

The Dhanbad-centred coalfields, historically administered under Bihar and now largely within Jharkhand, constitute a locus where organized criminal control over resource extraction and distribution has become entrenched. A locally rooted “coal mafia” has emerged with a hierarchical structure in which leadership figures—reportedly drawn in part from the coal trade‑union apparatus—exercise monopolistic influence over operational and strategic decisions across the mining economy.

This criminal-political apparatus exploits existing social cleavages and networks, notably caste affiliations and local patronage ties, to secure worker compliance and community acquiescence, thereby maintaining long‑term control of extraction and marketing channels. At the operational level, theft and diversion of coal are systemic: higher‑grade coal is frequently siphoned from official supply chains into illicit local and regional markets, while widespread pilferage has been routinized as part of the local economy.

Corruption accompanying these practices extends into financial and administrative domains. Documented modalities include inflated or fictitious procurement and supply expenditures, the fabrication of employment or contract records, and deceptive accounting designed to mask illegal transfers of coal and funds. Public lands adjacent to mining operations have also been appropriated or informally leased through coercive mechanisms, reshaping land‑use patterns and diminishing state control over mineral lands.

The illicit economy supports sizeable informal employment: many residents work for criminal networks to transport stolen coal by unpaved rural routes to clandestine warehouses and retail outlets, creating alternative livelihood pathways tightly bound to illegal extraction. These activities impose severe stresses on regional transport infrastructure—overland routes become degraded and rail corridors congested—and have spawned deceptive freight practices such as substituting stones or boulders for missing coal in wagons, undermining the integrity of rail freight operations.