Coal production in India is expected to be flat in 2025 calendar year as early and prolonged rains impacted mining activity with output declines at both Coal India (CIL) and Singareni Collieries Company (SCCL), which account for more than 80 per cent of the country’s mining output for the dry fuel.

“Coal production in India is expected to remain flat in 2025, with output projected to settle at 1,089 million tonne (mt), with public companies (CIL and SCCL) declining while commercial and captive blocks increase production,” the International Energy Agency (IEA) said.

In contrast, the country’s coal production rose by 7 per cent year-on-year (y-o-y) to reach 1,082 mt in 2024, an all-time high for the country.

Production

In the first nine months of the year, coal output (excluding lignite) increased slightly by 0.7 per cent, or roughly five mt y-o-y, again driven by growth in the captive mining sector, it added.

However, coal production declined due to heavy rainfall, between May and July 2025, resulting in lower output compared with the same months in 2024. The y-o-y increase observed in August 2025 was primarily due to the unusually weak production in August 2024, which had also been affected by heavy rains, IEA pointed out.

Underpinned by government policies and increasing demand, Indian coal production is forecast to reach nearly 1.3 billion tonnes by 2030, average annual growth of 3 per cent, with upward potential in the case that demand is higher than forecast, the agency noted. 

“We expect higher growth rates in the commercial and captive sectors than in the public sector,” it anticipated.

Demand

India remains a key driver of global coal demand, although total consumption in 2025 is expected to see a slight y-o-y decline of 1.2 per cent, falling by 16 mt to 1,297 mt, IEA said.

This marginal decrease is primarily the result of a 3 per cent drop in coal-fired power generation, driven by increased hydropower output and reduced electricity demand for cooling, alongside the continued expansion of renewable energy capacity. 

“Despite this, coal remains a central pillar of India’s electricity system. We estimate India’s coal consumption for power generation in 2025 to be 940 mt, approximately 73 per cent of its total coal consumption,” it anticipated.

While the government continues to expand non-fossil generation capacity in line with its 500 gigawatt (GW) target for 2030, the IEA said adding, in 2025 India commissioned or began trial operations at 20 new coal-fired power plants totalling 14 GW, with additional capacity under construction.

Electricity demand is anticipated to increase slightly in 2025, offset by higher hydropower output due to an early and prolonged monsoon season, as well as continued growth in solar and wind generation.

“Despite these additions, coal’s share of the electricity mix is projected to decline from 70 per cent in 2025 to 60 per cent by 2030, as renewable and nuclear power generation continue to grow,” IEA added. 

Source: The Hindu Business Line 

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