Logistics of Transporting Coal in India: Challenges and Opportunities

India has the fifth largest coal reserves in the world. The seven main states that are home to its coal mines are Jharkhand, Odisha, Chhattisgarh and West Bengal in the east, Madhya Pradesh in central, Telangana in the south and Maharashtra in western India. Coal is transported to almost all other parts of the country from these coal-producing states. However, the level of coal consumption is relatively low in the northern and north-eastern states as they use hydro-power to meet energy demand and moreover, they do not have a strong presence of heavy industries.

Prime customers of coal are located mainly in the south due to active presence of the steel and cement manufacturing sector here and the power generators that mainly depend on coal. Unfortunately, a significant quantity of coal reserves in Odisha fail to reach their customers in the south due to lack of adequate railways infrastructure and constraints in transport capacity. Many of them end up meeting their demand through imported coal which reaches them via ports.

Now, coal mining companies are inclining more and more towards transporting coal by road in order to bring down the rising stocks. With the railways struggling to take up the entire responsibility of transportation, can road transport rise up to the challenge and share the burden? Road transport is indeed, a viable alternative. As many mines are located in remote areas not connected by railways, their stocks can be moved by road through trucks. Moreover, road movement has the advantage of providing door-to-door delivery.

The government of India has set ambitious targets in achieving coal production in the country. To that end, it has announced the opening up of commercial coal mining for the private sector. This is the most ambitious reform in the coal sector since its nationalisation in 1973. Moreover, a dedicated four-lane road corridor has been constructed around the Basundhara and Talchers mines in Odisha.

With sentiments up for accelerating coal production in India and logistics management a key factor in sustainable development of the coal market, the future of coal transportation sector looks bright. Today, KCT Coal Sales is one of the largest coal logistics company in India. It transports up to 70 million metric tons of coal across the country every year by road, rail and sea servicing industrial customers in public and private sectors.

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