India to Establish Coal Trading Exchange to Enhance Price Discovery and Access

Strategic Insights -

The Indian government plans to establish a coal trading exchange, a digital marketplace to enable trading and price discovery of coal. The proposed coal exchange will be operated under the supervision of the Coal Controller Organisation and will allow commercial and private sector mines to sell coal to a larger base. The government aims to finalize the rules related to the coal exchange by November, and once the rules come into effect, exchange operators can seek authorisation from the Coal Controller for setting up an exchange. The move is expected to revolutionize the coal sales scenario, which is currently dominated by traditional mechanisms.

Key Takeaways:

  • The proposed coal exchange will function as a digital marketplace under the Coal Controller to enable transparent price discovery and wider access for both public and private miners.
  • The coal ministry expects to finalize the rules relating to setting up a coal exchange by November.
  • The government plans to establish a coal trading exchange to enable trading and price discovery of coal, which will allow commercial and private sector mines to sell coal to a larger base.
  • The exchange is expected to operate under the supervision of the Coal Controller Organisation.
  • India already has companies like the Indian Energy Exchange and the Power Exchange of India that operate electricity exchanges.
  • Coal production in the country has already breached the 1-billion-tonne mark in 2024-25 and is likely to grow beyond 1.5 billion tonnes by 2030.
  • The government aims to set up 100 million tonnes of coal gasification by 2030 to reduce import dependency on natural gas, methanol, and ammonia.
  • Significant progress has been made on coal gasification, with Coal India forming a joint venture with BHEL to set up the first coal gasification plant.
  • The first coal gasification plant is expected to be operational within 5 years.

Statistics:

  • Coal production in India breached the 1-billion-tonne mark in 2024-25.
  • The government aims to establish 100 million tonnes of coal gasification by 2030.
  • The first coal gasification plant is expected to be operational within 5 years.
  • Coal production in the country is likely to grow beyond 1.5 billion tonnes by 2030.

Sources:

  • The Asian Mining Congress organised by the Mining, Geological & Metallurgical Institute of India.
  • The consultation paper floated by the coal ministry in September.
  • PM Prasad, Chairman of Coal India
  • Vikram Dev Dutt, Coal Secretary.