India now ranks 3rd amongst the coal producing countries in the world. According to the 2008 BP Statistical Energy Survey, India had end 2007 coal reserves of 56498 million tonnes, 6.66% of the world total. Through a sustained programme of investment and greater thrust on application of modern technologies, it has been possible to raise the production of coal from a level of about 70 million tonnes at the time of nationalisation in the early 1970′s to production of 478.18 million tonnes in 2007. Most of the coal production in India comes from open pit mines which contribute over 81% of the total production. A number of large open pit mines of over 10 million tonnes per annum capacity are in operation. Underground mining currently accounts for around 19% of national output. Most of the production is achieved by conventional Bord and Pillar mining methods..

India’s lignite reserves are estimated at 6.5 billion tons. In January 2004, the Indian Government reduced the import duty on coal from 20% to 15%. Although India is a major producer of coal, it produces only limited quantities of coking coal needed by its steel plants. As a result, it is a large importer of coking coal, mostly from Australia. The reduction in import duty on coal will assist the steel producers and improve their competitiveness.

Coal is the dominant energy source in India, accounting for more than half of the country’s requirements. 70% of India’s coal production is used for power generation, with the remainder being used by heavy industry and public use. Domestic supplies satisfy most of India’s coal demand. According to the 2008 BP Statistical Energy Survey, India had 2007 coal consumption of 208 million tonnes oil equivalent. Unfortunately most of India’s coal is characterised by high ash content, but the quality has other useful qualities such as low sulphur content (generally 0.5%), low iron content in ash, low refractory nature of ash, low chlorine content and low trace element concentration. .