Coal gasification to save ₹1.5 trillion in foreign exchange in next 5 to 7 years

By reducing imports through coal gasification, India can save approximately ₹1.5 trillion in foreign exchange in the next 5 to 7 years. This information was shared by Coal Ministry Secretary Vikram Dev Datta at the fourth conference of Mines Ministers held in South Goa.

According to a report by Business Standard, Secretary Datta stated that the Central Government has committed financial incentives of ₹46,000 crore under two schemes to encourage coal gasification projects. He explained that the coal gasification process converts coal into synthetic gas (syngas), which can be used to manufacture several products that India currently imports in large quantities.

He noted that through this process, methanol, ethanol, ammonium nitrate used in explosives, and inputs for steel production based on Direct Reduced Iron (DRI) can be produced. Datta added that if these projects are launched properly and their scale increases, they will succeed in saving foreign exchange within 5 to 7 years.

The Secretary stated that coal gasification can become a tool for industrial diversification and regional development. He urged coal-producing states to bring supportive policies to attract investment. He mentioned that Odisha and Maharashtra have already implemented incentive policies, leading to projects arriving in clusters in Odisha's Angul district and Maharashtra's Chandrapur belt.

Vikram Dev Datta called upon coal-rich states such as Jharkhand, Chhattisgarh, and Odisha to formulate incentive policies for investors, so that the benefits of the Central Government's schemes can reach resource-rich areas. He clarified that coal gasification projects initially require large capital investment, as well as cooperation at the state level regarding electricity, water supply, and taxation.

Emphasizing employment opportunities, he said that gasification plants will create jobs in downstream industries, benefiting skilled and semi-skilled workers, strengthening local supply chains, and generating additional economic activity. He advised following the principle of "Mining with a conscience" for responsible mining.

Regarding reforms in the coal sector, Datta stated that the Commercial Mining Policy introduced in 2020 has removed restrictions on the end-use and sale of coal, thereby increasing private participation. Through 15 rounds of auctions, 137 mines have been allocated, with captive and commercial mines accounting for nearly 20 per cent of India's total coal production.

The government has increased the number of authorized agencies for mineral exploration from 13 government agencies to 57, which includes 44 recognized private agencies. He requested state governments to expedite the processes of land acquisition, public hearings, statutory clearances, and other permissions, as these delays hinder mining projects. Faster implementation will allow states to receive royalties and other revenues earlier, which can be used for development work.

Speaking on environmental initiatives, he said that the Coal Ministry has identified 147 mines for scientific closure within three years, of which 43 mines have already been closed. He added that scientific closure is not just about technically sealing mines, but about restoring the degraded environment and repurposing mining areas while keeping the needs of local communities in mind.