India fast-tracks 38 rail projects to boost domestic coal transport

India's federal coal ministry has identified 38 priority rail projects to reduce logistics costs, enhance efficiency in domestic coal transportation, and ensure timely coal supply from mines to plants. These projects, part of the country's coal logistics plan, will be expedited in close coordination with the Ministry of Railways, according to a statement released on Aug. 29.

Among the projects, the government has recently approved two key rail lines in Odisha that traverse several coal blocks. These projects are strategically important as they reduce the transportation distance from Sardega to power plants in northern India, enhancing overall efficiency.

Similarly, another railway line will significantly improve coal evacuation from the Talcher Coalfield, providing a direct and shorter route towards Nagpur and the western regions, the statement said. This line is expected to significantly lower logistics costs and boost the overall efficiency of coal transportation from the Talcher region.

"A robust coal evacuation network is critical for bolstering India's energy security, ensuring a consistent and reliable supply of coal to meet the growing demands of the country's power plants and industries," the statement said.

India's coal dispatch increased 8.39% on the year to 343.7 million mt in April-July period, out of which total dispatch by state-owned Coal India Ltd is 258.8 million mt, up 5.02%, coal ministry data said. Coal dispatch by captive mins increased 32.4% on the year to 63.59 MMt in the same period. Coal dispatch to power sector was up 2.89% on the year at 280.75 MMt while to non-regulated sector like cement, ceramics was up 42.3% at 62.94 MMt.

India's financial calendar runs April to March.

Railways provided 323 rakes for coal transport to power and industrial plants on an average per day in the April-July period, which is higher than 276 rakes for coal transport in the same period the previous year, the same data said.

"Coastal plants are making usual purchases, pre-festive restocking demand for Asian thermal coal has not yet started from India as the buyers await further drop in prices and most of the monsoon need is taken care of by improved coal supply from domestic mines" an India-based trader said.

The price of India-delivered 4,200 kcal/kg GAR averaged $66.80/mt in April-July, down from $73.15/mt over the same period the previous year, data from S&P Global Commodity Insights showed. Platts last assessed the grade at $61/mt CFR India on Aug. 29.

Meanwhile, CIL in a bid to increase the use of domestic produce at thermal power plants has decided to offer power utilities including independent power plant fuel beyond their Annual Contracted Quantity, Commodity Insights reported Aug. 14. The new provision will give power plants the flexibility to lift higher quantities of coal beyond their stipulated volume.