1. Most of the Northern as well as the Western parts of India do not have coalfields as most of the major coalfields are found in Orissa, West Bengal and Jharkhand.
There the industries using coal have to pay higher prices as coal being a bulky commodity has to be transported over long distances.
2. A large amount of coal has to be taken out from deep underground mines where effectiveness of machinery is reduced. Thus the employment of manpower is more.
3. There are heavy losses due to fires and pilferage.
4. In most mines outdated methods are used which reduces the rate of production of coal.
5. Insufficient supply of power hampers production.
6. High ash content and low calorific value of coal reduces its energy output and create problems of ash disposal.