Record Growth: Captive and Commercial Mines Take Centre Stage

The latest performance reports for the 2025-26 financial year reveal a striking trend. While the overall sector maintains steady growth, the captive and commercial segments are outperforming expectations.

For the third quarter (October–December) of FY 2025-26, coal production from these blocks reached 54.14 million tonnes (MT), representing a 5.35% year-on-year (YoY) increase. Even more impressive is the cumulative performance from April to December, where output surged by 9.72% compared to the previous year.

This momentum is not just about digging deeper; it’s about efficient movement. Coal dispatches—the actual delivery of coal to end-users like power plants and steel mills—also saw a healthy rise of 6.98% during the same nine-month period.

The Strategy Behind the Surge

The Ministry of Coal attributes this success to a “stable and performance-driven environment.” Several factors have converged to drive these numbers:

1. Policy Reforms: The introduction of commercial coal mining in 2020 was a game-changer. By allowing private players to mine and sell coal in the open market, the government injected competition and efficiency into a once-monopolised sector.
2. Expedited Approvals: Strategic policy measures have streamlined the process for operational approvals. The Ministry has been rigorously monitoring milestones to ensure that “producing” and “likely to produce” mines face fewer bureaucratic bottlenecks.
3. Modern Infrastructure: Enhanced coordination between mines, transporters, and end-users has reduced supply chain bottlenecks. The focus on “First Mile Connectivity” (FMC) projects ensures that coal moves from the pithead to the railhead with minimal environmental impact and maximum speed.

Bridging the Demand-Supply Gap

India’s energy appetite is growing. As the country enters 2026, the demand for power, steel, and cement is at an all-time high. Historically, India has relied on imports to bridge the gap when domestic production lagged.

Interestingly, while coal imports saw a temporary spike in November 2025 (up 28.1% due to winter restocking by steel mills), experts anticipate a sharp decline in the coming months. Why? Because the increased domestic availability from captive and commercial mines is finally providing a reliable alternative to expensive overseas shipments.

Commercial Mining: A Pillar of Energy Security

The success of the 11th and 12th rounds of commercial coal auctions indicates high investor confidence. As of late 2025, over 113 coal mines have been successfully auctioned since the inception of the commercial model.

These mines are not just about energy; they are economic engines. They are expected to generate:

• Annual Revenue: Over ₹35,000 crore for state governments.
• Employment: Opportunities for more than 3.4 lakh people in coal-bearing regions.
• Capital Investment: Approximately ₹38,000 crore in mining infrastructure.

The Road Ahead: Towards 1.5 Billion Tonnes

The government has set an ambitious target of reaching 1.5 billion tonnes of domestic coal production by 2029-30. While Coal India Limited (CIL) remains the dominant player with a target of 875 MT for FY26, the role of captive and commercial mines is becoming increasingly critical.

By allowing captive mine owners to sell up to 50% of their annual production in the open market, the government has ensured that surplus coal doesn’t sit idle but reaches the industries that need it most.

Conclusion

The rise in coal output from captive and commercial mines is a testament to India’s successful transition toward a more liberalized and efficient mining sector. As these mines ramp up capacity and more blocks become operational, India is moving closer to its goal of eliminating non-essential coal imports.

For the infrastructure and energy sectors, this means one thing: a more stable, reliable, and cost-effective fuel supply that will power the nation’s growth for decades to come.

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