FMC plans to accelerate the extraction of coal from mines

In accordance with the government’s coal logistics policy, the coal ministry has announced several first-mile connectivity (FMC) projects.

What exactly is first-mile connectivity in the coal industry?

  • FMC refers to coal transportation from pitheads to dispatch points, from which it is transported to consumers.
  • To replace road transport, coal producers use alternative transport methods such as mechanized conveyor systems and computerized loading onto railway rakes under FMC.
  • Manual intervention and loading time are reduced in FMC projects.
  • It also speeds up the evacuation or movement of coal from pitheads.

What is the policy on coal logistics?

  • The policy aims to create a “technologically enabled, integrated, cost-efficient, resilient, sustainable, and trusted logistics ecosystem in the country for accelerated and inclusive growth,” according to the draught.
  • Optimal infrastructure: In other words, it seeks to build an optimal infrastructure for coal transportation at the origin and destination points to allow for faster transportation.
  • It also aims to create an eco-friendly, multi-modal integrated national coal evacuation infrastructure.
  • Dedicated corridors: The other goal is to create smart coal logistics corridors to ensure complete oversight from the mine to the point of consumption.
  • Why is the government putting so much emphasis on FMC?
  • There are several gaps in the coal supply chain that will now be filled through planned projects.
  • FMC is part of the government’s plans to achieve energy security and reduce reliance on imports.
  • FMC would also reduce carbon emissions by reducing reliance on road transport for coal evacuation.

Economic significance of FMCs

  • Artificial scarcity: Last year, India experienced a power crisis due to a coal shortage.
  • Lack of railway rakes: In addition to the scarcity of domestic coal, the lack of railway rakes exacerbated the crisis. Following that, the government made an effort to increase the availability of rakes.
  • Given that power demand is expected to rise in tandem with economic growth, a robust coal logistics ecosystem has become critical.
  • Last-mile energy connectivity: In addition to first-mile connectivity, India is eager to improve last-mile connectivity.

So far, so good

  • The establishment of FMC would be included in the mine allocation process under the draught policy. As a result, more projects of this type are on the horizon.
  • The coal ministry has approved an additional 19 FMC projects for Coal India and Singareni Collieries, totaling 330 million tonnes per year (MTPA).
  • These projects will be completed by fiscal year 27.
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