Coal gasification can save Rs 1.5 lakh crore in forex in 5 to 7 years Official

Panaji, Nov 5 (PTI) Coal gasification projects have the potential to save India around Rs 1.5 lakh crore in foreign exchange over the next five to seven years through import substitution, Coal Ministry Secretary Vikram Dev Dutt said on Thursday.

    The Centre has committed financial incentives of Rs 46,000 crore under two schemes to encourage coal gasification projects, Dutt said, addressing the 4th Conference of Mining Ministers on Reforms in the Mines and Coal Sector in South Goa.

    "Mining with a conscience" should be the guiding principle for responsible miners, the official added.

    He said coal gasification, which converts coal into synthetic gas (syngas), can help manufacture several products that India currently imports in substantial quantities.

    "If the coal gasification projects get underway and gain scale, we would be succeeding in about five to seven years in saving about Rs one and a half lakh crore potentially of foreign exchange through this import substitution," Dutt said.

    "Coal gasification has the potential of becoming an instrument of industrial diversification and regional development," the official said, urging coal-producing states to introduce supportive policies to attract investments in the sector.

    Methanol, ethanol, and ammonium nitrate used in explosives and inputs for direct reduced iron (DRI)-based steel production could be manufactured through coal gasification, he noted.

    Odisha and Maharashtra have already introduced incentive policies to promote coal gasification, with projects coming up in clusters in Odisha's Angul district and Maharashtra's Chandrapur belt, Dutt pointed out.

    He also called upon coal-rich states such as Jharkhand, Chhattisgarh and Odisha to formulate policies offering incentives to investors, saying this would help attract projects and ensure that the benefits of central government schemes reach resource-rich regions.

    Coal gasification projects require substantial upfront capital investment as well as support at the state level in terms of electricity, water supply and taxation. Maharashtra and Odisha have taken steps in this direction, he said.

    Emphasising the employment potential of the sector, Dutt said gasification plants would generate jobs in downstream industries and benefit skilled and semi-skilled workers, besides strengthening local supply chains and creating additional economic activity.

    On coal sector reforms, Dutt said the commercial mining policy introduced in 2020 removed restrictions on end-use and sale of coal, paving the way for greater private participation.

    He said 137 mines had been allocated through 15 rounds of auctions, with captive and commercial mines accounting for around 20 per cent of India's total coal production.

    The government has also expanded the number of agencies authorised to undertake mineral exploration from 13 government agencies to 57, including 44 accredited private agencies, he informed.

    Dutt urged state governments to expedite land acquisition, public hearings, statutory clearances and other permissions required for operationalising coal blocks, saying delays in these processes often hinder mining projects.

    Faster operationalisation of auctioned coal blocks would ensure that states receive royalty and other revenue streams earlier, enabling them to fund development programmes, he stressed.

    Highlighting environmental initiatives, Dutt said the Coal Ministry had identified 147 mines for scientific closure over three years, of which 43 had already been scientifically closed.

    Scientific mine closure was not merely about technically sealing mines but also restoring degraded environments and repurposing mining areas after assessing the needs of local communities, he noted.

    The ministry has developed a digital tool called 'SuVikalp' to facilitate the assessment and repurposing of closed mines, he added.

    Dutt also stressed that the future of the coal sector should go beyond production targets and focus on productivity, technological advancement, transparency and environmental responsibility.

    "Mining with a conscience" should be the guiding principle for responsible miners, he said.

    The official also called for greater coordination between the Centre, state governments, coal companies and other stakeholders to make the sector competitive, efficient and environmentally sustainable.

    Union Minister for Coal and Mines G Kishan Reddy, MoS for Mines Satish Chandra Dubey and Goa Chief Minister Pramod Sawant were present on the occasion.

(This story has not been edited by THE WEEK and is auto-generated from PTI)