The Tale of Two Numbers
Recent analysis, primarily from organisations like Global Energy Monitor, highlights a significant divergence in India's coal sector. On one hand, the pipeline for proposed new coal mine capacity surged in 2025, nearly doubling to 638 million tonnes per
annum (Mtpa). This positions India as a primary driver of planned global coal expansion, second only to China. The increase was largely driven by ambitious plans in the states of Jharkhand and Odisha. On the other hand, the commissioning of new mines has slowed considerably. In 2025, new mines entering operation globally fell by nearly 40% from the previous year, which was already a decade low. While India is pushing ahead with proposals to meet future energy demand, the data suggests that turning these plans into operational mines is another challenge altogether.
Why the Big Gap Between Proposals and Reality?
Several stubborn obstacles stand between a project proposal and a functioning coal mine. A key issue is the significant underutilisation of existing capacity. Some reports indicate that over a third of the capacity at India's active mines goes unused, an amount that is actually greater than the entire proposed new capacity. This suggests that building new mines may not solve supply issues, which are often rooted in other problems. These challenges include chronic logistical hurdles in transporting coal from pitheads to power plants, land acquisition conflicts, and the need for statutory environmental clearances. Furthermore, many new projects threaten to displace a large number of families and strain already stressed water resources, adding layers of social and environmental opposition that can delay or derail projects indefinitely.
The Rising Shadow of Renewables
The economic case for coal is also facing unprecedented pressure from the rapidly falling cost of renewable energy. India has seen a record boom in solar power, adding enormous capacity in recent years. In fact, for the first time in 2025, wind and solar generation overtook coal in the global electricity mix. While coal still generates about 75% of India's electricity due to its reliability, the country has already surpassed its 2030 target of having 50% of its installed capacity from non-fossil fuel sources. This milestone reveals a growing tension between what India is building (renewables) and what it is burning (coal). Investors and energy professionals increasingly see a future where renewables surpass coal as the primary source of electricity, potentially as early as 2035, making massive new investments in coal a risky long-term bet.
Risk of Stranded Assets
This mismatch between a huge pipeline of proposed coal projects and a market that is steadily shifting towards renewables creates a significant financial risk: stranded assets. Projects that receive permits and financing but are ultimately never built or operated profitably could lock up immense capital. The International Energy Agency (IEA) predicts that global coal demand will plateau and then fall by the end of the decade. Advancing new coal mines in this environment is at odds with market trends. Analysts warn that the economic rationale for expanding coal mining gets weaker as low-cost clean energy becomes more dominant. This exposes companies, investors, and governments to the risk of being left with expensive, non-performing assets as the energy transition accelerates.
