A comprehensive study on indian coal sector – Challenges and impact on corporate strategy

Mining in India is a major economic activity which contributes significantly to the economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5% only but going by the GDP of the total industrial sector it contributes around 10% to 11%. Coal with a proven reserve of 860 billion tonnes is mined the most in the world. At the same time, the demand curve for this sector is always on the rising side. The major reasons are the soaring power demand in India and China, the growing worldwide steel production, and lastly, the increasingly stringent environment regulations. As a prospering economy, India faces energy security as a growing challenge and the coal production is expected to grow at a CAGR of around 7% during 2011–12 to 2013–14. The Indian coal market is set to witness great boost in near future because of the rising government initiatives. Recently, allocation of coal blocks and stake sales in PSU are some of the major steps that were taken by the government to boost the production and investment in the coal industry. However, the upward pressure would definitely widen the demand supply mismatch in the coming years. To address these concerns, Indian conglomerates are making efforts in overseas acquisitions as well. In addition, it is also exploring un-conventional alternatives such as Coal Gasification for supply of energy; varied coal gasification technologies are re-evolving over the globe to replace the conventional power generation methods. This paper emphasizes on the present and future challenges on Indian coal sector. Data has been collected from multiple sources of evidence to understand the importance of the topic, in addition to secondary sources.