[Skip to content]

Mixed prospects in the coal sector

Mixed prospects in the coal sector

06 June 2017

Coal has been the mainstay of freight traffic on Indian Railways, accounting for 50% of its total freight tonnage and 45% of freight revenues. However, rapid technological change, demand-side dynamics and environmental concerns are impacting the business. The rapid commissioning of cross-country transmission grids is making it more economic to develop large 'superthermal' power plants close to the mines and send electricity to distant consumption centres via the grid rather than transporting low-grade coal by rail. In order to meet a projected growth in coal production and reduce congestion, IR has embarked on some major rail improvements. One of the biggest is the 1839km Eastern Dedicated Freight Corridor, largely designed to link the eastern coalfields with power generators in the north and west. However, a drop in freight revenue means that the future of this corridor is being questioned, even before its has opened.

Railway Gazette International, May.2017. pp.54-55.