Coal India Chairman Highlights FMC as Key to Efficient and Sustainable Coal Transport

Shri P.M. Prasad, Chairman of Coal India Limited (CIL), delivered a keynote address at the “Workshop on Challenges of First Mile Connectivity (FMC)” organized by the Central Mine Planning & Design Institute Limited (CMPDI) in Ranchi, Jharkhand. The workshop focused on addressing the operational and logistical hurdles in implementing FMC projects, which are critical for streamlining coal transportation from pitheads to dispatch points. Shri Prasad emphasized the urgency of completing ongoing and upcoming FMC projects to enhance efficiency, reduce underloading and overloading issues, and promote sustainable coal logistics. Shri Achyut Ghatak, Director (Technical) at CIL, also provided insights into the status, construction, and environmental benefits of FMC initiatives. This article explores the significance of FMC, the key points raised during the workshop, and the broader implications for India’s coal sector and sustainability goals.

Background: The Role of First Mile Connectivity in Coal Logistics

Coal India Limited, the world’s largest coal producer, accounts for over 80% of India’s coal output, producing approximately 773 million tonnes in FY24. The coal sector is a cornerstone of India’s energy security, with coal-fired power plants meeting 70% of the country’s electricity demand. However, inefficiencies in coal transportation, particularly in the “first mile” from mine pitheads to railheads or dispatch points, have long posed challenges, including underloading, overloading, and delays, which increase logistics costs and environmental impact.

First Mile Connectivity (FMC) projects aim to modernize this critical segment of the coal supply chain by replacing traditional road transport with conveyor belts, rail sidings, and mechanized loading systems. These projects reduce reliance on diesel trucks, lower greenhouse gas emissions, and improve operational efficiency. As of March 2025, CIL has operationalized 23 FMC projects across its subsidiaries, with plans to commission 35 additional projects by FY28, targeting a capacity of 414 million tonnes per annum (MTPA). The government’s ₹24,000 crore investment in FMC underscores its strategic importance in achieving sustainable and cost-effective coal logistics.

Key Highlights from the Workshop

The “Workshop on Challenges of FMC” at CMPDI, a subsidiary of CIL, brought together industry stakeholders, policymakers, and technical experts to address implementation bottlenecks and strategize solutions. Key points from the addresses by Shri P.M. Prasad and Shri Achyut Ghatak include:

1. FMC as the Backbone of Coal Transport: Shri Prasad described FMC projects as the “backbone” of efficient coal transportation, emphasizing their role in minimizing logistical inefficiencies. He highlighted issues like underloading (where wagons carry less than their capacity) and overloading (which damages infrastructure and increases costs), noting that mechanized FMC systems ensure optimal loading and faster turnaround times. He urged accelerated efforts to complete ongoing projects, including 12 under construction, and to expedite upcoming ones to meet rising coal demand.

2. Urgency and Collaboration: The Chairman stressed the need for timely project execution, given the government’s target of increasing coal production to 1 billion tonnes by FY27. He called for collaborative stakeholder engagement, involving state governments, railway authorities, and local communities, to address challenges such as land acquisition, environmental clearances, and infrastructure integration. Posts on X echoed this sentiment, with users noting that delays in land acquisition have stalled several FMC projects in Jharkhand and Odisha.

3. Eco-Friendly and Sustainable Transport: Shri Achyut Ghatak, Director (Technical), underscored FMC’s environmental benefits, describing it as an eco-friendly and sustainable mode of transportation. By replacing road transport with conveyor belts and rail sidings, FMC reduces dust pollution, carbon emissions, and road congestion. Ghatak provided detailed insights into the construction and utilization of FMC projects, citing examples like the Kusmunda mega project in Chhattisgarh, which handles 50 MTPA, as a model for scalability.

4. Status of FMC Projects: Ghatak presented an update on CIL’s FMC portfolio, noting that the 23 operational projects handle 151 MTPA, with significant contributions from subsidiaries like South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL). He highlighted advancements in technology, such as automated loading systems and real-time monitoring, which enhance efficiency and transparency in coal dispatch.

Challenges in FMC Implementation

The workshop also addressed key challenges in scaling FMC projects. Land acquisition remains a significant hurdle, particularly in coal-rich states like Jharkhand, where community resistance and regulatory delays have slowed progress. Environmental clearances, while critical for sustainable operations, often extend project timelines due to complex approval processes. Additionally, integrating FMC infrastructure with Indian Railways’ network requires coordination to ensure adequate rail capacity and scheduling.

Posts on X have highlighted industry concerns about funding constraints, with some users noting that the high capital expenditure for FMC projects (estimated at ₹3.5 crore per MTPA) strains CIL’s financial resources, especially amid global coal price volatility. The workshop emphasized the need for innovative financing models, public-private partnerships, and streamlined regulatory processes to overcome these barriers.

Broader Context: Coal India’s Sustainability and Modernization Goals

The focus on FMC aligns with Coal India’s broader strategy to modernize operations and support India’s energy transition. While coal remains central to India’s energy mix, the government is balancing its reliance with investments in renewable energy and cleaner coal technologies. FMC projects contribute to this vision by reducing the environmental footprint of coal logistics, aligning with India’s net-zero emissions target by 2070. The initiative also supports the Atmanirbhar Bharat framework by fostering domestic expertise in advanced mining technologies.

The workshop’s timing is significant, as India’s coal demand is projected to grow by 4-5% annually through 2030, driven by industrial growth and power needs. CIL’s efforts to enhance FMC capacity are complemented by other initiatives, such as the Ministry of Coal’s coal gasification projects and the PM GatiShakti program, which aims to improve multi-modal connectivity for resource transport.

Industry and Economic Implications

The successful implementation of FMC projects could have far-reaching impacts on India’s coal sector and economy. By reducing logistics costs, which account for 20-25% of coal’s delivered price, FMC enhances the competitiveness of coal-based power and industries like steel and cement. The shift to mechanized systems also creates green jobs in engineering, technology, and infrastructure development, supporting India’s economic growth.

Environmentally, FMC projects are expected to cut CO2 emissions by 1.5-2 million tonnes annually by reducing diesel truck usage, according to CIL estimates. This aligns with India’s commitments under the Paris Agreement and complements initiatives like the PM E-DRIVE scheme for electric trucks, launched on July 11, 2025, to decarbonize freight transport.

The “Workshop on Challenges of FMC” hosted by CMPDI in Ranchi underscored the transformative potential of first mile connectivity in revolutionizing India’s coal logistics. Chairman Shri P.M. Prasad’s call for expedited project completion and stakeholder collaboration, coupled with Director (Technical) Shri Achyut Ghatak’s insights into FMC’s eco-friendly benefits, highlights Coal India’s commitment to efficiency and sustainability. As CIL navigates implementation challenges and scales its FMC portfolio, the initiative is poised to reduce costs, enhance energy security, and support India’s environmental goals. By modernizing the first mile of coal transport, Coal India is paving the way for a more sustainable and resilient coal sector, critical to powering India’s economic growth.