new Delhi: Improving the logistics of moving coal is important for India, which is trying to reduce its energy dependence. The Ministry of Coal has announced several First Mile Connectivity (FMC) projects in line with the Coal Logistics Policy of the Government. Peppermint Explain how it will help.
What is first mile connectivity in coal?
FMC refers to the movement of coal from the pithead to the dispatch points from where it will be delivered to the consumers. Under FMC, coal producers adopt alternative transport methods to replace road transport – such as mechanized conveyor systems and computerized loading on railway rakes. FMC projects reduce human intervention and loading time. It also speeds up the extraction process or movement of coal from the pits. Ritabrata Ghosh, Vice President and Sector Head, Corporate Sector Ratings, ICRA, says evacuation is a difficult phase in the coal supply chain and FMC will help ease the process.
What does the Coal Logistics Policy say?
As per the draft, the objective of the policy is to develop a “technologically competent, integrated, cost-efficient, resilient, sustainable and reliable logistics ecosystem in the country for accelerated and inclusive growth”. In other words, it aims to create optimal infrastructure. For transportation of coal at origin and destination points for quick transportation. It also seeks to develop an environment-friendly, multi-modal integrated national coal evacuation infrastructure. The second goal is to set up smart coal logistics corridors to ensure complete inspection from mine to mine. consumption point.
Why is the government insisting on FMC?
FMC is part of the government’s plans to achieve energy security – India wants to end dependence on imports. Experts say there are several missing links in the coal supply chain, which will now be addressed through the planned projects. FMC will also reduce carbon emissions, as it reduces dependence on road transport for coal evacuation.
What is its economic importance?
India faced a power crisis in April-May last year due to a shortage of coal. Shortage of domestic coal as well as low availability of railway rakes added to the crisis. Thereafter, the Government made efforts to increase the availability of rakes. Given that the demand for power is set to increase with increasing economic activity, a robust logistics ecosystem for coal has become a priority for the government. Apart from first mile connectivity, India is keen to strengthen the last mile as well.
How many ongoing projects of FMC?
Ministry of Coal will commission additional 19 FMC projects for Coal India and Singareni collieries with a capacity of 330 million tonnes per annum (MTPA). These projects will be implemented by FY27. The Ministry has already made investments in 55 projects with a capacity of 526 MTPA. 18,000 crores. Of these, eight projects with a capacity of 95.5 MTPA have been commissioned. Under the draft policy, setting up of FMC will be made a part of the mine allocation process. So, more such projects are bound to come.
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