A labourer carries coal in a basket to load it in a truck at a coal store in the northern Indian city of Chandigarh.Reuters

Coal India on Friday started production at its newly opened coal mine in Jharkhand with an aim to boost electrical supply through power plants. This is the first mine to be opened in the last five years.

Coal India aims to produce around 12 million tons of coal per annum from Jharkhand's Amrapali mine, which would help stabilize coal shortages in power plants. In the recent times, it has struggled to raise its output to meet rising demand from power companies, despite being one of the world's 50 biggest reserves. Shortage of coal has made India world's fourth largest coal importer, followed by Japan, China and South Korea.

It took almost a decade to dig coal from Amrapali open cast pit in Jharkhand. The implementation of project was delayed due to lack of rail networks to the mine and land acquisitions procedures.

New Coal and Power Minister Piyush Goyal had ordered to start mining work in Jharkhand.

"The minister has given us strict orders to raise output," Central Coalfields Chairman Gopal Singh told Reuters at an event where Goyal inaugurated the mine from a New Delhi hotel through video conferencing.

"India's coal production was 566 million tonnes in the fiscal year ended March 31, but demand was in the range of 715-720 million. Nearly half of India's coal-fired power plants had only enough stocks to last a week or less," Goyal said.

According to the Reuters report, the Amrapali mine in Jharkhand is expected to produce 3 million tons in fiscal year 2014, so that Central Coal fields would raise production by 10 percent to 55 million tons.

Chairman of Central Coalfields also explained that Jharkhand's mine will start producing at full capacity in two years after being connected to railway network.

Besides, Coal India is open to hire a chairman from the private sector. The post of chairman is vacant following the resignation of S.Narsing Rao, a member of Indian Administrative Service. As of now, Additional Secretary A K Dubey had been given charge for a period of three months.

"I have also initiated a dialogue to see if we can attract talent going beyond the routine selection process, to attract talent from the private sector, of well meaning people of high integrity and proven management skills who are willing to sacrifice a few years may be for less pay," Firstpost quoted Goyal.

In the year 2013, Coal India produced 462 million tons as against the target of 482 million tons.

However, stock price of Coal India on Friday closed lower at ₹362.70 with a loss of ₹7.20 or 1.95 percent.