Coal – The Black Diamond

Oct 25, 2013 No Comments by



Coal is the largest source of energy for the generation of electricity worldwide, as well as one of the largest worldwide anthropogenic sources of carbon dioxide releases. Coal is the most important & abundant fossil fuel in India. It accounts for 55% of the Country’s Energy need.

Even under the least coal dependence scenario, coal is expected to contribute 41% of the total preliminary energy demand in 2032 and about 40% of the total installed capacity in power in the country. Coal as an input in the manufacturing process of steel, cement, fertilizer and many other industries. Ministry of Coal has planned to increase the coal production by an average of 36 million tons per year in the 12th five year plan. They estimate that coal production will grow at a CAGR of around 9% during 2011-12 to 2013-14.

Cement is essential for future infrastructural growth. The industry, which produces 358 million tonnes of cement annually, requires 50 million tonnes of coal as a raw material stock every year. However, in 2011, it received only 10.63 million tonnes – 23% of its actual requirement – from CIL and its subsidiaries.

Types of Coal:

(i) Anthracite: It is the highest quality hard coal. It is found in parts of Jammu and Kashmir.

(ii) Bituminous: This coal has been buried deep and subjected to increased temperatures. It is the most popular coal in commercial use. Metallurgical coal is high grade bituminous coal which has a special value for smelting iron in blast furnaces.

(iii) Lignite: It is a low grade brown coal, which is soft with high moisture content. The lignite reserves are in Neyveli in Tamil Nadu and is used for the generation of electricity.

(iv) Peat: Decaying plants in swamps produce peat, which has low carbon content and high moisture contents with the result low heating capacity.

Coal production includes data for solid fuels only. Included in the hard coal category are bituminous and anthracite. The sub-bituminous coal includes lignite and brown coal.


Coal is under Open General Licence (OGL) list. India exports coal to the neighboring countries to meet their demand of coal.  The traditional buyers of Indian coal are Nepal, Bangladesh and Bhutan.  Export to Nepal and Bhutan is done in rupee exchange as per the protocol between the two countries and with Bangladesh it is done in US Dollar. India exports thermal coal.


Coking coal  is being  imported by Steel Authority of India Limited (SAIL) and other  Steel sector manufacturing  mainly to bridge the gap between the requirement and indigenous availability. Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal on consideration of transport logistic and commercial prudence as well as against export entitlements. Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnace.

COAL INDIA LTD is the monopoly producer of coal in India. It is state controlled, headquarter being at Kolkata which regulates all the coal mining company in India.



Country 2012(million tons) Change 2012 over 2011 2012 share of total
China 1825.0 3.5% 47.5%
US 515.9 -7.5% 13.4%
Australia 241.1 4.2% 6.3%
Indonesia 237.4 9.0% 6.2%
India 228.8 5.8% 6.0%

 Global coal production grew by 2%. The Asia Pacific region accounted for all of the net increase, offsetting a large decline in the US. The Asia Pacific region now accounts for more than two-thirds of global output. Coal consumption increased by a below-average 2.5%. The Asia Pacific region was also responsible for all of the net growth in global consumption. A second consecutive large decline in North America (-11.3%) more than offset growth in other regions; EU consumption grew for a third consecutive year.

Trends in production of Coal in India:

*All numbers are in million tons unit.

Year Coking Non-coking Lignite Total
2010-2011 49.55 483.15 37.73 570.43
2011-2012 51.65 488.29 42.33 582.27
Growth rate % 4.25 1.06 12.19 2.08




Country 2012(million tons) Change 2012 over 2011 2012 share of total
China 1873.3 6.1% 50.2%
US 437.8 -11.9% 11.7%
Australia 49.3 -4.9% 1.3%
Indonesia 50.4 2.8% 1.4%
India 298.3 9.9% 8.0%


Consumption outside the OECD rose by a below-average 5.4%; Chinese consumption growth was a below-average 6.1%, but China still accounted for all of the net growth in global coal consumption, and China accounted for more than half of global coal consumption for the first time. OECD consumption declined by 4.2% with losses in the US (-11.9%) offsetting increases in Europe and Japan. EU consumption grew for a third consecutive year.


*All numbers are in million tons unit.

Country Anthracite & Bituminous Sub-bituminous & Lignite Total
China 62200 52300 114500
US 108501 128784 237295
Australia 37100 39300 76400
Indonesia 56100 4500 60600
India 1520 4009 5529


Seeing the importance of coal, it will be appropriate to call it the black diamond.


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