India’s Coal Ministry is planning to create a coal trading exchange as domestic coal production increases, driven by government efforts to boost output and reforms allowing private companies to operate mines.
The ministry stated that with more domestic coal available, India is expected to shift towards a surplus coal market. This change will require a reform of coal sales mechanisms to create a competitive market for coal trading.
At present, government-run companies like Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) control coal sales. India, the world’s second-largest coal consumer after China, needs a platform like the proposed Coal Trading Exchange (CTE) to allow private miners to sell coal on the open market, according to the ministry.
The proposed exchange would create a “many-to-many” platform, enabling buyers and sellers to bid simultaneously. This would make coal price discovery more efficient and competitive, the ministry explained.
In 2024, India began reducing its coal imports by increasing domestic coal production. The country has been working to reduce its reliance on foreign coal to meet growing power demand, even though its domestic coal is generally lower in quality and energy content compared to most imported coal.
India’s coal production is set to reach new records in the coming years. The coal ministry expects the country to produce 1 billion tons of coal by the end of the 2024-2025 fiscal year, with annual output likely to surpass 1.5 billion tons by 2030.
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