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Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
Review of Indian coal sector
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Review of Indian coal sector

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Overview of Indian Coal Sector

Overview of Indian Coal Sector

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  • Coal consumption has increased in almost all industry segments with electricity contributing the highest consumption clocking a CAGR of nearly 9% over the years from 1970 to 2011.Except cotton industry which shows a negative CAGR, the consumption of coal for other industries has gone up over the years. For steel and cement sector, coal consumption almost remained stagnant in 2007 to 2009 due to global slump. It recovered in 2009, but recorded a down swing in 2010-11 indicating the slow growth of the segment due to global recession and European crisis.
  • There has been an increasing trend in the import of coal. This is evident from the fact that the gross import of coal has steadily increased from 20.93 MTs during 2000-01 to 73.26 MTs during 2009-10.During this period, the quantum of coal exported increased from 1.29 MTs during 2000-01 to 2.45 MTs during 2009-10. However, there was a decline of 5.92% in gross import and 8.89% in net imports of coal in 2010-11 over the previous year. The exports to neighbouring countries increased by about 80% during the same period.
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    • 1. REVIEW OF INDIAN COAL SECTOR MANOJ JHAWAR 12125027 , MBA,IIT KANPUR
    • 2. Coal on Global perspective  Globally, coal resources have been estimated at over 861 billion tonne  Coal meets around 30.3% of the global primary energy needs and generates 42% of the world’s electricity  Coal production in the Asia Pacific region has grown tremendously and accounts for over 67% of the total production globally (2012) as compared to about 27% in 1981 (in terms of energy equivalent).  In year 2012 around 6.1 billion tonne of hard coal and 1 billion tonne of brown coal were used worldwide
    • 3. Brief facts about India Coal Industry  India has the fifth largest coal reserves in the world.  88% are non-coking coal reserves & 12% coking coal reserves  Indian coal is characterised by its high ash content (45%) and low sulphur content  Power sector is the largest consumer of coal followed by the iron and steel and cement segments
    • 4. Demand -Supply scene  Coal production has increased from~431 MT in 2006-07 to ~554 MT* in 2011-12 (an increase of 28.5%).  Demand for coal has grown at a CAGR of more than 7% in the last decade and has reached around 600 MT  Country’s total demand-supply gap (including coking coal) at about 98MT  India imports about 85 million tonne of coal
    • 5. Trend in Coal consumption Trend in industry wise consumption Trends in Coal Import
    • 6. Trends in Coal consumption (Industry wise)  During 1970-71, the railways were the major consumer of coal (15.58 MTs), followed by steel and washery industries (13.53 MTs), electricity generation (13.21 MT) and cement (3.52 MTs).  Since 1975, the electricity generation is the biggest consumer of coal, followed by steel industries. Estimated coal consumption for electricity generation increased from 23 MTs during 1975-76 to 435 MTs during 2011-12.
    • 7.  Coal consumption has increased in almost all industry segments with electricity contributing the highest consumption clocking a CAGR of nearly 9% over the years from 1970 to 2011.Except cotton industry which shows a negative CAGR, the consumption of coal for other industries has gone up over the years.  For steel and cement sector, coal consumption almost remained stagnant in 2007 to 2009 due to global slump. It recovered in 2009, but recorded a down swing in 2010-11 indicating the slow growth of the segment due to global recession and European crisis.
    • 8. Trend in Coal Import  Gross import of coal has steadily increased from 20.93 MTs during 2000-01 to 73.26 MTs during 2009-10.During this period, the quantum of coal exported increased from 1.29 MTs during 2000-01 to 2.45 MTs during 2009-10. However, there was a decline of 5.92% in gross import and 8.89% in net imports of coal in 2010-11 over the previous year. The exports to neighbouring countries increased by about 80% during the same period
    • 9. Important observations about Coal import  China & India becoming the highest gross net importer of the coal  India was traditionally a coking coal importer due to unavailability of good quality coking coal for steel, but the situation has changed in favour of non coking coal in the past five years with non coking coal imports rising from countries like Indonesia and South Africa.  Further, the coal washing capacity in the country has not increased sufficiently, due to various reasons, to generate the required quantity of washed coal for consumption, particularly in steel plants. This necessitates the import of high quality coal to meet the requirements of steel plants
    • 10. Sector wise Coal consumption in india 2011-12 (Source : Coal Ministry)
    • 11. Electricity Sector  India is the world’s fifth largest energy consumer, accounting for 4.1% of the global energy consumption.  The current per capita consumption of energy in India is 0.5 toe against the global average of 1.9 toe, indicating a high potential for growth in this sector  Total electricity consumed in India approximately 80% is produced from coal
    • 12. Steel sector  In 2011, the world crude steel production reached 1,518 MT, reflecting a growth of 6.2% over 2010.  The per capita finished steel consumption in 2011 is estimated at 215 kg for world and 460 kg for China, while that for India it is estimated currently at 55 kg (provisional). This clearly indicates scope for increasing the per capita steel consumption, a factor which correlates to the coking coal availability and production within the country.
    • 13. Coal demand trend of Steel industry in India vis-à-vis Steel production
    • 14. Coal imports by Steel industry
    • 15. Cement sector  India is the second largest producer of cement in the world  Around 450g of coal is consumed to produce 900g of cement. Ratio of 1:2  cement industry is the third largest consumer of coal in the country.
    • 16. Coal demand trend of cement Industry in India vis-à-vis cement production
    • 17. Major Coal Mining Companies  Based on production data from Coal controller organization report 2011-12, top 5 coal producing company in terms of coal production are :  1. CIL (PSU)  2. SCCL (PSU)  3. PANEM (Private)  4. TSL (Private)  5. JPL (Private)
    • 18. NCDP (New Coal distribution Policy)  The category of Core/Non Core sector was dispensed with  Defence and Railways requirement of coal to be met in full  Power and Fertiliser sector normative requirement to be met with 100% supply  Other sectors demand to be met with 75% of their normative requirement  State nominated agencies to be provided with coal to further distribution to small and medium industries for capacity of 4200 tonnes per annum  Steel plants will be supplied coal, but price to be linked with import parity  Fuel Supply Agreement to be signed with all end consumers lifting coal from CIL
    • 19. Coal Sector Value Chain
    • 20. Mining Industry’s Contribution to the GDP
    • 21. Captive Coal Blocks
    • 22. Ways to increase coal supplies in India  Operational or sustenance issues  Fund raising  Performance improvement  All the minerals are not reported as per UNFC classification  Key administrative issues  Long queue of mining applications pending at different levels with the state and centre: This is a deterrent for future investments.  Single window clearance agency (SWCA)  Large number of compliance reports to be filed by the investors to CCO, state DMG, DGMS, tribunals, state and central agencies  Multiple registration requirements for miners,transporters, traders and end-users
    • 23. Ways to increase coal supplies in India...  Regulatory issues  Lack of policy support for transfer of mining concessions  Blocking of resources  Lack of incentives for exploration  Fiscal issues  Poor connectivity of mining areas and poor evacuation facilities  Infrastructural issues  Cadastral (Khasra) maps are either not digitised or the geo-referencing has not been done properly. This creates problems in lease boundary determination, thus hampering genuine miners.
    • 24. Challenges in increasing the production capacity  For CIL,179 forestry proposals are awaiting clearances and if all approvals are secured on time, it canmore than double its output to 1,132 MT, given that mines start production from 2016-17.  Majority of the coal projects have been halted and delayed due to issues in acquiring land and strict rules and regulations (R&R).  Bottlenecks in domestic coal transportation and lack of proper road connectivity further increase the challenge. Also, availability of railway wagons and mismatch of demand and supply of wagons and coal offtake affect production capacity.  Delay in mining activities at captive coal blocks and concerns relating to theincreasing ash content of run-of-
    • 25. Way Forward for CIL  CIL needs to strengthen the operations in its core area of mining  Aggressive investment of surplus available with CIL, may go in for new technology and UG mining, improvement in transport and logistics  Switch to market driven pricing for different consumers (regulated pricing for power and fertiliser sector and market price at par with other unregulated sector)
    • 26. Way forward for Coal Ministry  Coal ministry should attract private investment in exploration, drilling and planning activities and also in mining through necessary policy changes and welcome the private players  The bore hole density from 1.5 per sq km to 15 per sq km without any forest clearance.  Competitive bidding for coal blocks but only after full exploration of coal blocks  The government has initiated the process of competitive bidding of 54 coal blocks and Crisil has submitted its report on coal bidding guidelines. It is under evaluation from different stake holders. The government has identified coal blocks and segregated them so that the coal blocks come under different categories for power, steel and state companies.  The sooner the coal regulator is in place, the better it will be for the coal industry
    • 27. Way Forward for Private Players  Private parties to enter aggressively through MDO route wherever available  Coal washeries is lucrative business option, need to partner with state or central government, else develop captive coal washery for own use  Aggressively foreign asset acquisition and exploring arbitrage opportunity, whether to source coal to the country or trade in global platform
    • 28. My Recommendations  There is a need for private players in coal mining operations and MDO provides the best opportunity for private players in the current scenario. e.g  Huge investment and big push in UG mining is inevitable for future sustainability coal mining operations.  Only explored coal blocks are considered for competitive bidding for captive coal block allocation and government should fast track the process.  CIL needs to put all its act together for a double digit growth in coal production, lack of co-ordination between ministries poses the biggest hurdle.  Exploration offers the maximum opportunity for private players, if opened fully, coal washing the next big thing

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