Coal sector development in india sample

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Table of Contents

TABLE OF CONTENTS
1. Coal Sector in India: Snapshot ............................................................................................................................ 1
1.1 Introduction .................................................................................................................................................. 1
1.2 Coal Resources in India ................................................................................................................................. 2
1.2.1 State Wise Allocation ............................................................................................................................. 2
1.2.2 Category-Wise Coal Resources .............................................................................................................. 3
1.3 Industry structure ......................................................................................................................................... 3
1.3.1 Roles and Responsibilities of Key Agencies Involved ............................................................................. 3
1.4 Sector Wise Consumption Trends................................................................................................................. 4
1.4.1 Power Sector.......................................................................................................................................... 5
1.4.2 Steel sector ............................................................................................................................................ 7
1.4.3 Cement sector........................................................................................................................................ 7
1.5 Financial Performance of Coal Sector During Eleventh Five year plan ......................................................... 7
1.6 Key Developments 2012-2013 ...................................................................................................................... 8
1.7 Conclusion .................................................................................................................................................... 9
2. Global Scenario ................................................................................................................................................. 10
2.1 Introduction ................................................................................................................................................ 10
2.2 Global Market Trends-H1 2013 .................................................................................................................. 11
2.2 Country Wise Production trends ................................................................................................................ 12
2.2.1 United states ........................................................................................................................................ 13
2.2 China ....................................................................................................................................................... 14
2.3 Australia .................................................................................................................................................. 15
2.4 Indonesia ................................................................................................................................................ 16
2.5 Russia ...................................................................................................................................................... 17
2.6 Germany ................................................................................................................................................. 18
2.3 Global Coal Production Forecast ................................................................................................................ 18
3. Latest Policies and Regulatory Issues ............................................................................................................... 19
3.1 New Reforms Proposed by the Government .............................................................................................. 19
3.2 New Fuel Supply Agreement Policy ............................................................................................................ 21

Table of Contents

3.2.1 Power Plants/Units Where FSAs Are Yet To Be Signed........................................................................ 26
3.2.2 Recent Amendment in FSA Agreement ............................................................................................... 33
3.3 PPP model on coal mining .......................................................................................................................... 34
3.4 COAL REGULATORY Authority BILL ............................................................................................................. 34
3.4.1 BACKGROUND ...................................................................................................................................... 35
3.4.2 Structure of the Regulatory Authority ................................................................................................. 35
3.4.3 Functions and Powers of the Coal Regulatory Authority ..................................................................... 35
3.4.4 Advisory Functions ............................................................................................................................... 36
3.4.5 Regulation of Pricing of Coal ................................................................................................................ 36
3.4.6 Funding of the Regulatory Authority ................................................................................................... 36
3.4.7 Accountability ...................................................................................................................................... 36
3.4.8 Dispute Resolution ............................................................................................................................... 37
3.4.9 Appellate Tribunal ............................................................................................................................... 37
3.5 E Auction ..................................................................................................................................................... 37
3.6 new Mineral and Mines (Regulation and Development) Act, 2010 ........................................................... 39
3.6.1 The Mines and Minerals (Development and Regulation) Bill 2011 ..................................................... 40
3.7 new Land Acquisition Bill Proposal and its Implications ............................................................................. 41
3.7.1 Key Highlights ...................................................................................................................................... 42
3.7.2 Compensation Mechanism Used ......................................................................................................... 43
3.7.3 How are investor concerns addressed ................................................................................................. 43
3.8 Conclusion .................................................................................................................................................. 44
4. Domestic Coal Reserves and Production Status ............................................................................................... 45
4.1 Inventory of Geological Resource of Indian Coal ........................................................................................ 45
4.1.1 Type And Category-Wise Coal Resources Of India............................................................................... 45
4.1.2 State Geological Resources Of Coal ..................................................................................................... 46
4.2 Total Number Of Mines .............................................................................................................................. 46
4.3 Annual Coal Production Trends .................................................................................................................. 47
4.4 Company-Wise Coal Dispatches Trends ..................................................................................................... 47
4.5 All-India Coal Production During Eleventh Plan .......................................................................................... 49

Table of Contents

4.6 Company-Wise Target And Actual Coal Production In India ...................................................................... 50
4.7 State-Wise Coal Production Trends ............................................................................................................ 51
4.8 Trends Of Coal Production From Opencast & Underground Mines ........................................................... 52
4.9 PRODUCTION FROM BLOCKS ALLOCATED TO POWER SECTOR .................................................................. 54
4.9.1 Details of Coal Blocks Allocated to Private Sector for IPPs/ CPPs ........................................................ 55
4.10 Company-wise Challenges faced in increasing coal production ............................................................... 57
4.11 Foreign Collaboration Initiatives to increase coal production .................................................................. 58
4.11.1 COOPERATION WITH CANADA .......................................................................................................... 59
4.11.2 COOPERATION WITH FRANCE............................................................................................................ 59
4.11.3 COOPERATION WITH U.K. .................................................................................................................. 60
4.11.4 COOPERATION WITH POLAND ........................................................................................................... 60
4.11.5 CO-OPERATION WITH RUSSIA............................................................................................................ 61
4.11.6 COOPERATION WITH KAZAKHSTAN ................................................................................................... 61
4.11.7 COOPETATION WITH MOZAMBIQUE ................................................................................................. 62
4.11.8 CO-OPERATION WITH GERMANY ...................................................................................................... 62
4.11.9 CO-OPERATION WITH AUSTRALIA ..................................................................................................... 63
4.11.10 COOPERATION WITH CHINA ............................................................................................................ 64
4.11.11 COOPERATION WITH USA ................................................................................................................ 65
4.11.12 COOPERATION WITH SOUTH AFRICA .............................................................................................. 66
4.11.13 Cooperation with Japan ................................................................................................................... 66
5. Status of Coal Blocks Allocated ......................................................................................................................... 67
5.1 Number of Coal Blocks Allocated to Public and Private Sector Companies ............................................... 69
5.2 Progress of Development of Coal Blocks Allocated to NTPC ...................................................................... 69
5.3 Status of Captive Coal and Lignite Blocks ................................................................................................... 71
5.4 Coal Block Allocation to Power Companies (August 2012) ......................................................................... 72
5.5 De-Allocated Coal Blocks ............................................................................................................................ 73
5.6 Recent Developments ................................................................................................................................. 73
6. Demand Supply Gap Analysis ........................................................................................................................... 75
6.1 Introduction ................................................................................................................................................ 75

Table of Contents

6.2 Impact of Coal shortage .............................................................................................................................. 76
6.2.1 Critical Coal Stock Position of Key Thermal Stations ........................................................................... 76
6.2.2 Year Wise Generation Loss due to Coal shortage ................................................................................ 77
6.2.3 Affected and Stranded Thermal capacity- Present and Projected ...................................................... 78
6.2.4 Falling PLF of Coal Based Generating Plants ........................................................................................ 79
6.3 Coal Shortage Projections during Twelfth Plan .......................................................................................... 80
6.4 Coal Requirement Projections during XIII Plan ........................................................................................... 81
6.5 Sector wise coal demand projections ......................................................................................................... 82
6.6 Suggested measures to overcome coal crisis ............................................................................................. 82
6.6.1 Domestic coal production to be augmented to reduce dependence on imports ............................... 83
6.6.2 Expedite implementation of coal procurement and pricing ................................................................ 83
6.6.3 Increase in fuel cost (imported coal) to be made pass-through .......................................................... 84
6.6.4 Coal imports by project companies directly with fuel pass ................................................................. 85
6.6.5 Other Medium and long term remedial measures .............................................................................. 85
7. Role of Imported Coal in Existing Scenario ....................................................................................................... 86
7.1 Introduction ................................................................................................................................................ 86
7.2 Year-wise Import of Coal ............................................................................................................................ 86
7.3 Coal Import by Power Utilities in 2012-13 .................................................................................................. 87
7.4 Import of Coal by NTPC ............................................................................................................................... 89
7.4 Expected Hike in prices due to rising coal imports ..................................................................................... 90
7.5 Key Issues and Challenges .......................................................................................................................... 91
7.6 Country wise import of Coal ....................................................................................................................... 92
7.7 Recent Developments ................................................................................................................................. 93
7.8 Coal Imports Forecast ................................................................................................................................. 94
8. Overseas Coal Acquisition................................................................................................................................. 95
8.1 Introduction ................................................................................................................................................ 95
8.2 Indonesia .................................................................................................................................................... 95
8.2.1 Introduction ......................................................................................................................................... 95
8.2.2 Indonesian Coal Quality and Costs Involved ........................................................................................ 95

Table of Contents

8.2.3 Recent Regulatory Update- Foreign Investment in the Indonesian Coal Mining Industry .................. 96
8.2.4 Regulation Details ................................................................................................................................ 96
8.2.5 India CoMpanies Investment in Indonesian Coal Mines ...................................................................... 97
8.3 Australia ...................................................................................................................................................... 98
8.3.1 Introduction ......................................................................................................................................... 98
8.3.2 Recent Challenges restraining foreign investment in Australian Coal Mining Industry ...................... 98
8.3.3 Initiatives taken by the new government so far .................................................................................. 99
8.3.4 Indian investments in Australian coal mines and export infrastructure ........................................... 100
8.4 South Africa .............................................................................................................................................. 100
8.4.1 Introduction ....................................................................................................................................... 100
8.4.2 Challenges for Foreign Investors in the South African Coal Industry: ............................................... 101
8.4.3 South Africa government keen on promoting investment from Indian Companies ......................... 101
8.4.4 Indian companies’ investment in South African Coal Sector ............................................................. 102
8.5 Mozambique ............................................................................................................................................. 102
8.5.1 Introduction ....................................................................................................................................... 102
8.5.2 Challenges in Mozambique ................................................................................................................ 103
8.5.3 Indian Companies Investment in Mozambique Coal Sector .............................................................. 104
8.6 Comparison Matrix: Top Four Coal Producing Nations ............................................................................ 105
9. Coal Technologies ........................................................................................................................................... 107
9.1 Coal Mining Technologies ......................................................................................................................... 107
9.1.1 Opencast Mining ................................................................................................................................ 107
9.1.2 Underground Mining ......................................................................................................................... 110
9.2 Technology Initiatives taken by CIl in recent Years .................................................................................. 111
9.2.1 Sourcing Technology .......................................................................................................................... 112
9.3 Combustion Technologies ............................................................................................................................ 113
9.3.1 Sub Critical ......................................................................................................................................... 113
9.3.2 Super Critical ...................................................................................................................................... 113
9.3.2.1 Few Upcoming Coal plants based on super critical technology ..................................................... 114
9.3.4 Advanced Ultra Supercritical Technology .......................................................................................... 120

Table of Contents

9.4 Gasification and combined cycle power generation (IGCC) technologies ................................................ 121
9.4.1 Surface Coal Gasification ................................................................................................................... 121
9.4.2 Underground Coal Gasification .......................................................................................................... 123
9.4.3 Examples of few Upcoming coal plants based on IGCC Technologies ............................................... 124
10. Coal Prices..................................................................................................................................................... 125
10.1 Domestic Coal Prices............................................................................................................................... 125
10.3 International Coal Prices Trends ............................................................................................................. 127
10.3.1 Indonesian Coal Prices ..................................................................................................................... 128
10.3.2 AustraliaN Coal Prices ...................................................................................................................... 129
10.3.3 South African Coal Prices ................................................................................................................. 129
10.3.4 Columbia Coal Prices ....................................................................................................................... 130
10.2 Domestic Vs International Price Comparison ......................................................................................... 130
10.1.1 Recommendations of Ministry of Power on Price Pooling of Imported Coal - May 2013 ................... 131
10.1.1.1 Option A - (Pooling for pre 2009 and post 2009 plants) ............................................................... 136
10.1.1.2 Option B - (Pooling Only for post 2009 plants) ............................................................................. 138
10.1.1.3 Option C - (Pooling for all plants excluding pre 2009 State plants including pre 2009 NTPC plants)
.................................................................................................................................................................... 140
10.1.1.4 Option D - (Based on CCEA decision) ............................................................................................ 142
11: Coal Washeries ............................................................................................................................................. 143
11.1 Introduction ............................................................................................................................................ 143
11.2 Advantages of Coal Washing .................................................................................................................. 143
11.3 Details of Existing Coal Washeries .......................................................................................................... 144
11.3.1 State Wise Coal Washeries status ................................................................................................... 145
11.3.2 Consumer Wise Coal Washeries Details .......................................................................................... 145
11.3.3 Details of Coal Washeries setup by CIL ............................................................................................ 146
11.4 performance of coal washeries in operation in the XI plan period ........................................................ 148
11.4.1 Coking Coal ...................................................................................................................................... 148
11.4.2 Non Coking Coal ............................................................................................................................... 149
11.5 Non-coking coal washery installed capacity, utilization and yield.......................................................... 150

Table of Contents

11.6 Coal Washeries Proposed by CIL ............................................................................................................. 150
11.7 Technology.............................................................................................................................................. 151
11.7.1 Existing Technologies ....................................................................................................................... 153
11.8 Washed Coal Requirements by Sectors .................................................................................................. 154
11.9 Economic Benefits of Coal Washing ....................................................................................................... 156
11.10 Business Models ................................................................................................................................... 156
11.10.1 Existing Model ............................................................................................................................... 157
11.10.2 Business Model for Private Operators ........................................................................................... 158
11.11 Key Challenges Faced by Coal Washeries ............................................................................................. 160
11.12 Comparative Ranking of Different States Basis Risk Profile.................................................................. 163
12. Coal Scam Implications ................................................................................................................................. 165
12.1 What is Coalgate Scam ........................................................................................................................... 165
12.2 Benefits to the Private Players ................................................................................................................ 165
12.2 Blocks Allocation Details as Highlighted by CAG..................................................................................... 166
12.3 Action taken by the Government ........................................................................................................... 168
12.4 Impact of Deallocation ............................................................................................................................ 170
13. Other Recent Developments ........................................................................................................................ 172
13.1 Company Related .................................................................................................................................... 172
13.2 Industry Related...................................................................................................................................... 175
13.3 Coal Import/Export/Acquisitions ............................................................................................................ 176
13.4 Coal Production ...................................................................................................................................... 179
13.5 Regulatory News ..................................................................................................................................... 181
Chapter 14: Company Profiles ............................................................................................................................ 184
14.1 COAL INDIA LTD ...................................................................................................................................... 184
14.1.1 COMPANY OVERVIEW ..................................................................................................................... 184
14.1.2 Strategic Vision ................................................................................................................................ 184
14.1.3 Subsidiaries of Coal India Ltd: .......................................................................................................... 184
14.1.4 CIL Production Trends ...................................................................................................................... 186
14.1.5 CIL Financial Highlights .................................................................................................................... 187

Table of Contents

14.1.5 SWOT Analysis of Coal India Ltd. ..................................................................................................... 188
14.1.6 Recent Developments...................................................................................................................... 191
14.2 Eastern Coalfields Limited ...................................................................................................................... 192
14.2.1 Production Performance ................................................................................................................. 192
14.2.2 Swot Analysis ................................................................................................................................... 194
14.2.3 Recent Developments ...................................................................................................................... 195
14.3 Northern Coalfields Limited .................................................................................................................... 195
14.3.1 Coal Production ............................................................................................................................... 195
Off-Take ...................................................................................................................................................... 196
14.3.2 FINANCIAL REVIEW .......................................................................................................................... 197
14.3.3 Future investment ........................................................................................................................... 197
14.4 Western Coalfields limited ..................................................................................................................... 198
14.4.1 Production Statistics ........................................................................................................................ 198
Coal Offtake ................................................................................................................................................ 199
14.4.2 Financial Performance ..................................................................................................................... 199
14.5 Central Coalfields Limited (CCL) .............................................................................................................. 200
14.5.1 Production Statistics ........................................................................................................................ 200
14.5.2 Financial Performance ..................................................................................................................... 202
14.6 South Eastern Coalfields Ltd ................................................................................................................... 203
14.6.1 Company Overview .......................................................................................................................... 203
14.6.2 Production Statistics: ....................................................................................................................... 203
14.6.3 SECL Financial Highlights ................................................................................................................. 205
14.7 Bharat Coking Coal Limited ..................................................................................................................... 207
14.7.1 Coal Production of BCCL .................................................................................................................. 207
14.7.2 Financial Performance of BCCL ........................................................................................................ 208
14.8 Mahanadi Coalfields Limited (MCL) ........................................................................................................ 209
14.8.1 Production Performance of Mahanadi Coal Fields .......................................................................... 209
14.8.2 Financial Performance of MCL ......................................................................................................... 210
14.8.3 Swot Analysis of Mahanadi Coalfileds ............................................................................................. 211

Table of Contents

14.9 Singareni Collieries Company Limited .................................................................................................... 212
14.9.1 Coal Production ............................................................................................................................... 212
14.9.2 Swot Analysis of Singareni Collieries Company Ltd ......................................................................... 214
14.9.3 Recent DevelopmentS ..................................................................................................................... 217
14.10 Gupta Coalfields & Washeries Ltd ........................................................................................................ 218
14.10.1 Gupta Group Business ................................................................................................................... 219
14.10.2 Financial Performance of Gupta .................................................................................................... 219
14.11 Aryan Coal Benefications Private Limited ............................................................................................. 220
14.11.1 Fianacial Performance ................................................................................................................... 220
14.11.2 Strengths ........................................................................................................................................ 221
Annexure ............................................................................................................................................................ 222

Chapter 1: Coal Sector in India

1. COAL SECTOR IN INDIA: SNAPSHOT
1.1 INTRODUCTION
India is the third-largest economy in the purchasing power parity (PPP) index, next to USA and China
and the second-largest growing economy based on real GDP. With the rising economic activity,
demand for energy sources has also been growing consistently. At present, fossil fuels, viz oil, gas
and coal meet around four fifth of the total energy demand in the world, which will continue to
command a predominant share in the next two decades or so.
As per the BP Statistics 2013, country-wise energy consumption reveals that, India is the fourth
largest energy consumer accounting for 5.1% (563.51 Mtoe) of the global energy use as of December
2012. It is followed by the US (17.7% or 2,208.8 Mtoe), Russia (5.6% or 694.2 Mtoe). However, in
terms of fastest growing energy consuming countries in last ten years, India is the world’s fifthfastest energy consumer with a CAGR of 6.1%.

Cotent Hidden

Figure 1.1: Country wise Trends in Energy Consumption
Top 10 World Energy Consumers (MTOE), 2012
2735

World's Fastest Energy Consumers, 2002-12 (%)
9.8%

9.3% 9.3%

2209
6.3% 6.1% 5.9%

Cotent Hidden
694

563 478

5.9% 5.8% 5.7%

5.4%

329 312 275 271 245

Source: BP Stats 2013 and Cerebral Research

From the above statistics, it is clear that India's energy needs are expanding too fast with its
increased industrialization and capacity addition in Power generation. This is where 'Coal' steps in. In
India coal is the critical input for major infrastructure industries like Power, Steel and Cement.



1


Figure 1.2: Key facts stating importance of coal in India's energy scenario

Coal meets around
52% of India's
primary
commercial energy
needs against 29%
the world over

Cotent Hidden

Around 66% of
India's power
generation is coal
based

India is the third
largest coal
producing country
in the world after
China and US

India has the fifth
largest coal
reserves in the
world

Source: Cerebral Business Research

1.2 COAL RESOURCES IN INDIA
As a result of exploration carried out up to the maximum depth of 1200m by the Geological Survey
of India (GSI), Central Mine Planning and Design Institute (CMPDI), Singareni Collieries Company Ltd
(SCCL) and Mineral Exploration Corporation Limited (MECL) etc, a cumulative total of 2,93,497
Million Tonnes of Geological Resources of Coal have so far been estimated in the country. The coal
resources of India are available in older Gondwana Formations (292005 MT) of peninsular India and
younger Tertiary formations (1493 MT) of north-eastern region. The details of state-wise and
category wise geological resources of coal (as on 01/04/2012) are given below.
1.2.1 STATE WISE ALLOCATION
Most coal reserves are located in the eastern parts of the country. Jharkhand, Chhattisgarh, and
Orissa account for approximately 70 percent of the country's coal reserves. Other significant coal
producing states include West Bengal, Andhra Pradesh, Madhya Pradesh, and Maharashtra.
Figure 1.3: State wise coal resources allocation (%)
Maharashtra
Andhra Pradesh 4%
8%

Others
1%

Source: Ministry of Coal, Cerebral Research



2


1.2.2 CATEGORY-WISE COAL RESOURCES
Out of 293.5 billion tonnes (Bt) of coal reserves—“Prime” coking coal are 5.3 Bt, Medium & Semicoking coals are 28 Bt and Non-coking coals 250.8 Bt. Most of these resources occur in Gondwanas
and the balance in the Tertiary formations.
Table 1.1: Type and Category-wise coal resources of India as on 1.4.2012, (in Million Tonnes)
Type of Coal
(A) Coking :-Prime Coking
-Medium Coking

Proved

Indicated

Inferred

Total

4614.35

698.71

0

5313.06

12836.84

11951.47

1880.23

26668.54

-Semi-Coking
Sub-Total Coking
(B) Non-Coking:(C) Tertiary Coal

Cotent Hidden

Grand Total
Source: Ministry of Coal

1.3 INDUSTRY STRUCTURE
Currently, the government enjoys a monopoly in producing coal with over 90% of the production
coming from government-controlled mines. The policy for captive mining was introduced in 1993.
This opened the coal sector to private investment, although no promising progress has been made in

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1.4 SECTOR WISE CONSUMPTION TRENDS
In India, the end-use sectors of coal mainly include electricity, iron and steel and cement. Demand
from the unorganized small scale sector comprising primarily of the brick and ceramic industry is
relatively large though infirm as users switch between coal, firewood and biomass depending on
their relative price.

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3


Figure 1.4: Sector-wise Coal Consumption (%)
Sector wise consumption Projected 2012-13

Sector wise consumption Projected 2016-

Others,
13%

Power
utilities,
66%

Source: Planning Commission as per XII plan estimates and projections

1.4.1 POWER SECTOR
As of September 30, 2013, coal-based installed capacity in India was 134.4 GW, accounting for
around 59% of the country’s total capacity. Despite issues such as coal shortages, delays in coal
transportation, high carbon emissions, relatively low plant load factors (PLFs) and operational
inefficiencies affecting power generation from coal, it still emerges as the most-preferred fuel for
future capacity additions due to economic and energy security reasons. Coal’s share in India’s total
power generation has increased from 65 GW in 2004 to 130 GW in 2013 at a CAGR of about 8%.

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4


Figure 1.5 Break-up and Growth of Installed Coal Capacity, as of June 30, 2013 (%, GW)
Coal Based Capacity Installed (GW)
Y-o-Y Growth (%)- RHS

160

25%

140

20%

120
100

15%

80

Content Hidden

10%

60
40

5%

20

0%
Sep'13

2013

2012

2011

2010

2009

2008

2007

2006

2005

0
2004

Diesel
1%

Coal
59%

Source: CEA, Cerebral Business Research

However, coal supply has not kept pace with the growth in generation capacity. In terms of last five
years demand supply analysis, Generation capacity (coal) grew at CAGR of 14.2% p.a. over last 5
years, whereas, coal supply has grown at a negligible CAGR of 6% p.a. during this period.
Table 1.2: Coal Demand Supply Analysis, FY2009-13
Particulars

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013

CAGR (%)

Capacity (MW)

77,600

14.2%

Coal supply (MT)

363.0

6%


In FY13, the demand for coal exceeded its supply by around 192 MT

.


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5


Table 1.3: Details of Affected and Stranded Capacity due to coal shortage
Particulars

Capacity at
January 31, 2013
(MW) (A)
Coal

Installed
Capacity

Coal

Coal

Gas

Total

Gas

8,800

Total

53,000

Stranded
Capacity

Total

Capacity at
March 31, 2017
(MW) (A+B)

122,900

Affected
Capacity

Gas

Capacity addition
th
for balance XII plan
(MW) (B)

60,300


Impacts of the coal supply deficit on power sector are:
•
•

Presently 71,900 MW capacity affected due to inadequate coal/gas in FY13
Investments of INR 340,000 Crore impacted

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•

Enhance long term energy security through proactive planning for future fuel demand and
supply as well as the optimal fuel mix

1.4.2 STEEL SECTOR
Coal is an essential input in the production of steel and presently about 70% of the world's steel
production is based on coal. The Indian steel industry has been facing severe coal shortage for last
several years.

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1.4.3 CEMENT SECTOR
India is the second largest producer of cement in the world. Large amount of energy is required
during the production of cement and coal is used as an energy source.

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1.5 FINANCIAL PERFORMANCE OF COAL SECTOR DURING ELEVENTH FIVE YEAR PLAN 1
The Eleventh Plan outlay of 37,100 crore for MoC was planned to be financed through an Internal
and Extra Budgetary Resources (IEBR) of 35,774.37 crore, and

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Table1.4: Financial Performance of the Coal Sector
S.No.
1

CIL

2

SCCL

3

NLC-Power

4

NLC- Mines

5

Eleventh Plan Outlay

Sector

Total NLC

Approved

MTA

Anticipated

17,390.07

16,090.68

13,460.78

Total IEBR
6

Central Sector Schemes
Total MOC

Source: Planning Commission

1.6 KEY DEVELOPMENTS 2012-2013
In the recent past, India’s coal sector has received a lot of attention highlighting various problems
faced by the sector such as:
1. Captive block allocation: The Government Auditor or the Comptroller and Auditor General
(CAG), in a recent report, estimated the losses due to the government’s policy of giving out coal
blocks for free to the tune of Rs1.86 lakh crore.

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2.
3.
4.

5. Disinvestment of Coal India Ltd.: The government intends to disinvest 5 per cent of paid up
equity capital or over 31.58 crore shares of CIL through Offer for Sale of shares by promoters
through the stock exchanges.

1

Source: Planning Commission



7


1.7 CONCLUSION

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8

Chapter 2: Global Scenario

2. GLOBAL SCENARIO
2.1 INTRODUCTION
Worldwide, compared to all other fossil fuels, coal is the most abundant and is widely distributed
across the continents. Coal is also the second most dominant source of primary energy behind oil,
accounting for approximately 28% of total primary energy consumption.

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ng economic performance – are key drivers of coal consumption among these emerging economies.
Figure 2.1: Total World Production and Consumption Trends, as of 31 Dec 2012 (in BToe)

40

38

38

35

36
31

32

29

30
26

28
26
24

24
22

37

28

31

32

36

0.2
0.3

2.9

33 34

0.3
0.2

2.7

1.0

34

28

38

1.1

35

32 33 32

29

26

24
2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

20

Source: BP Statistical Report 2013

Content Deleted



9


Table 2.1: Country Wise Reserves and Production Details, 2012
S No.

Countries

Reserves (MT)

1

USA

237295

2

Australia
India

Kazakhstan

8

South Africa

9

Poland

10

Indonesia

11

100.00%

Germany

7

3845.30

60600

6

100.00%

76400

5

Share of total

China

4

Production
(MTOE)

Russia

3

Reserves in % of
total
27.60%

Others
Total

860938


2.2 GLOBAL MARKET TRENDS-H1 2013
•

The rapid expansion of coal demand and supply experienced over the last decade was driven by
the rise in demand by China and other Asian economies.

• Content Deleted
•
•
•
•
•
•
•

The market for coal-fired power stations took a hit last year when the World Bank announced it
will no longer lend countries money to build them.

2.2 COUNTRY WISE PRODUCTION TRENDS
China is having huge production of coal which accounts to about 49% of the total production,
followed by US, Australia, Indonesia and India.

Content Deleted


10


Figure 2.2: Country Wise breakup, Coal Production, as of December 31, 2012


Content Deleted

Figure 2.3: Production and Consumption pattern of key countries, 2012 (mtoe)
78

600
500
400

192
74

300
200

187

34

100
0
Production

Consumption




11


2.2.1 UNITED STATES
On analyzing last five year coal production and consumption trend, it is seen that, both production
as well as consumption are falling.

Content Deleted
Figure 2.4: U.S. Coal Production and Consumption, 2008 - 2012 (MToe)
700.0

596.7
540.8

600.0

551.2

556.1

2009

2010

2011

515.9

500.0
400.0
300.0
200.0
100.0
0.0
2008

2012

Source: BP Statistical Review 2013

2.2 CHINA
China is world’s largest producer and consumer of coal, and accounts for more than 45% of both
global totals. China accounted for more than three-quarters of incremental coal production in 2012
and domestic

Content Deleted



12


Figure 2.5: China Coal Production and Consumption, 2008 - 2012 (MToe)
2000.0
1800.0
1600.0
1400.0

1369.2
1401.0

1470.7
1486.5

1609.7
1617.5

1760.8
1758.0

1873.3
1825.0

1200.0
1000.0
800.0
600.0
400.0
200.0
0.0

In terms of import export trends, China, typically was a net coal exporter, and became a net coal
importer in 2009 for the first time nearly after two decades.

Content Deleted
2.3 AUSTRALIA
Production & consumption
Coal plays a major role in meeting domestic energy needs, accounting for about 69 percent of
Australian electricity generation.

Content Deleted



13


Figure 2.6: Australia Coal Production and Consumption, 2008 - 2012 (MToe)
300
250
200
150
100
50
0

Clearly from the graph above, it is seen that the gap between production and consumption is very
high. Consumption is much below the production, which is the prime reason of Australia being the
second largest coal exporter in the world.

Content Deleted
Year

Import

Export

2003

0

230,395

2004

0

2005

0

2006

56

2007
2008
2009
2010
2011
CAGR

0.95%

3.93%

Source: EIA

2.4 INDONESIA



14


Unlike many other countries, Indonesia's government encourages increased use of coal in the power
sector, due to relatively abundant domestic supply and as a way to reduce the use of expensive
diesel and fuel oil.

Content Deleted
2.3 GLOBAL COAL PRODUCTION FORECAST
According to the estimates from U.S. Energy Information Administration (EIA), global coal production
is expected to reach 11.5 billion tonnes by 2040,

5722

501

432

358

446

434

2040

400

537

589

2030

993

850

696

1177

1156

1080

2020

685

5633

4725

Content Deleted

Source: U.S. Energy Information Administration, International Energy Outlook 2013 Report



15

Chapter 3: Latest Policies and Regulatory Issues

3. LATEST POLICIES AND REGULATORY ISSUES
Indian coal industry is monopolised by a single producer i.e. Coal India Limited. In year 2000, a bill
was introduced in the parliament to amend the acts related to private participation and allow
private participants in coal sector. However, the bill failed to gain the necessary support. The
absence of legislative amendments required to induct competition make the sector vulnerable to
the ill effects, viz. lack of quality technology and production methods, lack of transparency in coal
block allocations, falling production, price increases, etc.

Content Deleted
Table 3.2: Details of the FSAs concluded with power plants commissioned during 1.4.2009 till
05.08.2013
S.N
o.

Year of
Commission
ing

Power Plants/Units

Capacity
(MW)

2011-12

Bajaj Energy Private
Limited (Khamberkhera
Unit-I & II)

CCL

90

0.390

21/11/2012

2

2011-12

Limited (Maqsoodpur
unit-I & II)

CCL

3

2011-12

Limited (Barkhera Unit-I)

CCL

4

2009-10

Rosa Power Supply
Company Limited Phase I
( Unit I)

CCL

2012-13

Vellure'Unlt-2

MCL

500

2.310

24/07/2013

34793

131.066

1

82
Total

FSA Qty.
(Mt)

Date of
Execution/
Migration to FSA
Model Oct'12

Comp
any

Remarks


Content Deleted



16

Chapter 3: Latest Policies and Regulatory Issues

Table 3.4: List of Power Plants/Units appearing in the MOC letters dated 17.02.12 as well as and
17.07.13 where FSAs are yet to be signed
S.No.

Unit/Plant
Name
(Details)

Company
Name

Name Of
subsidia
ry
compan
y

Capaci
ty
(Mw)

Quantity
as per
LOA
(mt)

1

Pathadi
(UNCO)
Unit- 1

UNCO Power
Limited

SECL

300

1.450

2

Bhilai JV
Unit-1

JV
(NTPC+SAIL)

SECL

250

1.200

38

Muzaffarpu
r TPP, Unit2

JV
(NTPC+BSEB)

ECL

195

COD
date
(confirm
ed/
Expected
)
09.04.20
10

0.609

21.10.20
09

Reason(s) for not
signing of FSA

The unit is not having
PPA and reluctant to
sign FSA in the new
model.
Since it is in the
category of CPP, Not
eligible for execution of
FSA as IPP.
It has been informed to
the JV for signing the
FSA in CPP category.
ECL vide letter dated
July 26, 2013 requested
the unit for signing of
FSA. The JV has to come
forward for
signing the FSA.

Source: Minstry of Coal

Government intervention to resolve the issue between CIL and power companies
To strike a middle ground between CIL and power companies, the Prime Minister Office (PMO) has
intervened and suggested a revision to CIL’s new FSA to address the concerns of all stakeholders.

Content Deleted
Table 3.5: Details of coal blocks allocated under the new rules
Sl.
No
1
2
14

Coal Block / Capacity /
Host State
Tentuloi/1234
MT/Odisha
Bhalumuda/550
MT/Chhattisgarh
KalyanpurBadalpara/102 MT/
Jharkhand

Proposed
Applicant
State/CPSU

Proposed Govt. Company

Proposed
allocated Coal
Reserves(MT)

Odisha

Odisha Thermal Power Corporation
Ltd. (OTPCL)

1234.00

CPSU / NTPC

NTPC Ltd.

550.00

Harayana

HPGCL

51.00

UP

UPRVUNL

51.00




17

Chapter 5: Status of Coal Blocks Allocated

4. DOMESTIC COAL RESERVES AND PRODUCTION STATUS
India has the fifth largest coal reserves in the world. Of the total reserves, nearly 88% are non-coking
coal reserves. The country’s coal production has increased from 431 MT in 2006-07 to 554 MT*
in2011-12 (CAGR 5.1%). On the other hand, the demand for coal has grown at a CAGR of more than
7% in the last decade and has reached around 600 MT in 2012-13.

Content Deleted
Table 4.1: The Type and Category-wise coal resources of India as on 1.4.2012 (in Million Tonnes)
Type of Coal
(A) Coking :-Prime Coking
-Medium Coking
-Semi-Coking
Sub-Total Coking
(B) Non-Coking
(C) Tertiary Coal
Grand Total

Proved

Indicated

Inferred

Total

4614.35

698.71

0

5313.06

118144.81


4.1.2 STATE GEOLOGICAL RESOURCES OF COAL
Most coal reserves are located in the eastern parts of the country. Jharkhand, Chhattisgarh, and
Orissa account for approximately 70 percent of the country's coal reserves. Other significant coal
producing states include West Bengal, Andhra Pradesh, Madhya Pradesh, and Maharashtra.
Table 4.2: Gondwana Coalfields as on April 1, 2012
State

Geological Resources of Coal ( in Million Tonnes)
Proved

Indicated

Inferred

9566.61

9553.91

3034.34

22154.86

Assam

0

2.79

0

2.79

Bihar

0

0

160

160

32383.99

292004.51

Andhra Pradesh

Chhattisgarh

13987.85

Jharkhand

Total

40163.22

Madhya Pradesh
Maharashtra
Orissa
Sikkim
Uttar Pradesh
West Bengal
Total
Source: Ministry of coal



18


Content Deleted
4.8 TRENDS OF COAL PRODUCTION FROM OPENCAST & UNDERGROUND MINES
In last five years, in CIL, production from Open Cast (OC) mines witnessed a much higher CAGR of
7.2% while the production from Under Ground (UG) mines grew by just 2.1% due to lackluster
performance in the Conventional B&P technology. However, the UG segment performance was still
better at CIL, as SCCL posted a negative 1.1% CAGR over the same period. Production from OC mines
for SCCL was almost at par with CIL, registering a CAGR of 6.5%.
Table 4.7: Trends of Production Of Raw Coal From Opencast & Underground Mines (in MT)
Company

Technology

2007-08

2008-09

2009-10

2010-11

2011-12
(Projected)

0.32

0.35

0.35

0.30

0.30

CIL
OC

Manual
Mechanised
Total OC

437.34

Total UG

12.26

TOTAL

40.61

44.55

45.01

46.00

47.01


Table 4.8: Details of Coal Blocks Allocated to Private Sector for IPPs/ CPPs - August 2013
S.No.

Name of the Company

Date of
Allotment

Coal Block
allocated

Coal fields

State

Geological
Reserves
(In MT)

1

RPG Industries / CESC
Ltd.

10.08.1993

Sarisatolli

Raniganj

West Bengal

140.47

2

Utkal Coal Ltd. (formerly
ICCL)

29.05.1998

Utkal-C

Talcher

Orissa

208.77

28 (b)

Adhunik Thermal Energy
Ltd.

28.05.2009

Ganeshpur

North
Karanpura

Jharkhand


Content Deleted
4.11.10 COOPERATION WITH CHINA
9th meeting of the Indo-China Joint Working Group on Coal held during 9th – 11th February 2004 in
India (New Delhi). Chinese delegation was led by Mr. Zhao Tiechui, Deputy Administrator of State of



19


Administration of Work Safety (SWAS) State Administration of Coal Mines Safety (SACCS), PR China
and Indian delegation led by Dr. P.K.Mishra, Secretary (Coal) and the following bilateral
issues/projects were discussed in the meeting.
•
•
•

BCCL -Moonidih project-Seam RXVI Top.
Jhanjra project of ECL.
Performance of existing Longwall faces at SECL.

Content Deleted
Table 5.5: Details of De-allocated blocks
S. No.

Name of the Block

Block Allocation

Date of
Allocation

Date of Deallocation

1

Binani Cement Limited

Datima

05.09.2008

27.04.2010

2

Murli Industries and Grace Industries

Lohara (East)

27.06.2008

17.05.2010

3

Maharastra State Mining Corporation
Ltd.

Agarzari

25.07.2007

28.06.2010

17

Damodar Valley Corporation

Saharpur
Jamarpani

25.07.2007

14.06.2011

Source: Ministry of Coal, Cerebral Business Research

5.6 RECENT DEVELOPMENTS
Aug 2013: Five states receive fresh allocation of coal blocks from the Coal ministry
The coal ministry has decided to allocate new coal blocks to five states - Madhya Pradesh,
Chhattisgarh, Orissa, Andhra Pradesh and Rajasthan. Coal from the blocks will be used for generating
power. The coal ministry has said that the companies which will use the blocks will have to pay a
reserve price.



20

Chapter 7: Role of Imported Coal in Existing Scenario

6. DEMAND SUPPLY GAP ANALYSIS
6.1 INTRODUCTION
Despite India’s huge coal reserves, there is a growing concern on the increasing demand-supply gap;
attributed primarily to the rapidly rising coal demand outstripping the production growth. Over the
last five years, the demand for coal has been growing at an average rate of 8–9 percent annually as
compared to a 5–6 percent

Content Deleted
6.2.2 YEAR WISE GENERATION LOSS DUE TO COAL SHORTAGE
Generation loss on account of Current Stranded Capacity estimated is at INR 42,000 Crore (120
billion units @ INR 3.50 per unit); about 0.45% of GDP
Table 6.2: Generation loss due to Shortage of Coal for the year 2012-13 reported by Power Utilities
Sr. No.

State

1.

Haryana

2.

U.P.

3.
TOTAL

Thermal Power Station

Capacity (MW)

Generation Loss
(MU)

MAHATMA GANDHI-CLP

1320

1562.0

UNCHAHAR-NTPC

1050

18.0

DADRI(NCPP) -NTPC

1820

169.0

39812.5

11736


Content Deleted



21


7. ROLE OF IMPORTED COAL IN EXISTING SCENARIO
7.1 INTRODUCTION
Presently, India ranks fourth in the coal import demand, being led by Japan. India accounts for about
10% of the world’s import coal demand. It is facing stiff competition from other Asian economies like
Japan, South Korea and China. Japan has continued to lead the import demand, China is fast catching
up and its demand is estimated to rise at significantly high rate (CAGR 29%) between 2008 and 2013.
Table 7.2: Company Wise Import Statistics (MT)
Name of Utility Plant

2012-13

% Materialisation

Target MT

Achievement MT

Torrent

0.50

0.292

58%

GSECL

1.50

0.359

24%

CESC
Reliance Energy (Dahanu)
HPGCL
APGENCO
WBPDCL
DVC
UPRVUNL
RVUNL
MSPGCL
MPGCL
TNEB
KPCL
OPGCL
NTPC
Pathadih
NTPC (JV) Indira Gandhi
Reliance Energy Rosa
Sterlite
NTPC SAIL Power CO
Tata (Maithon RB)
Lanco Anpara
CSEB
Bajaj Hindustan
TVNL
Vedanta (Balco)
NTPC (JV-Vallur)
Adani Power (Tiroda)
CLP (Mahatma Gandhi)



22


Table 7.3: Details of coal import during 2012-13 by NTPC
Thermal Power Station

Capacity as on
31.03.2013
(MW)

Coal
imported (in MT)

Average landed
cost of imported
coal (INR /
Tonne)

Talcher Super

3000

2.218

5905

Indicative*
Increase in tariff
(Rs. / kWh) due
to blending of
imported coal
0.45

Farakka

2100

1.048

6578

0.19

Kahalgaon
Ramagundam I&II
Simhadri
Dadri
Rihand
Tanda
Unchahar
Vindhyachal
Korba
Sipat
Total

Content Deleted
7.6 COUNTRY WISE IMPORT OF COAL
India's coal imports rose 29% to 135 million tonnes in the 2012/13 fiscal year, according to data from
government sources. Thermal coal imports for use in power plants jumped three-quarters to 97.23
million tonnes, while imports of coking coal, used in steel-making, rose a modest 1.2% to 32.2 million
tonnes.

Content Deleted



23

Chapter 8: Overseas Coal Acquisition

8. OVERSEAS COAL ACQUISITION
8.1 INTRODUCTION
To overcome coal shortage problem, most of the companies in India are looking to source coal from
other countries either through fuel supply agreements or buying coal assets in coal rich countries.
Countries in which Indian companies have shown interest in recent past include Indonesia, South
Africa, Columbia, Mongolia and Mozambique among others.

Content Deleted
8.2 INDONESIA
8.2.1 INTRODUCTION
Indonesia has witnessed a robust increase in coal production, coal exports and domestic sales of coal
since the early 1990s, when the coal mining sector was reopened for foreign investment. The
Indonesian coal industry is rather fragmented with only a few big producers and many small players
that own coal mines and coal mine concessions

Content Deleted



24

Chapter 8: Overseas Coal Acquisition

8.6 COMPARISON MATRIX: TOP FOUR COAL PRODUCING NATIONS
Table 8.1: Comparison Matrix: Top Four Coal Producing Nations
Countries

Australia

Indonesia

Coal Regions

Queensland (overly
exploited), New South
Wales (overly
exploited),
Surat Basin & Galilee
Basin (open for
exploration)

South Africa

Mozambique

Sumatra (overly
exploited), Kalimantan
(overly exploited),
Papua, Java, Maluku
& Sulawesi (partly
exploited).

Cost of
Mining
Coal Quality

Infrastructure

Tax Regime

Political
Stability
Proximity to
Indian Ports

Overall
Assessment




25

Chapter 9: Coal Technologies

9. COAL TECHNOLOGIES
Clean Coal Technologies (CCTs) are defined as ‘technologies designed to enhance both the efficiency
and the environmental acceptability of coal extraction, preparation and use’. These technologies
reduce emissions, reduce waste, and increase the amount of energy gained from each tonne of coal.

Content Deleted
Table 9.1 CIL HEMM Population: 2007-12
Name of
Equipment

2007

Dragline

41

2008

2009

2010

2011

2012
Envisaged
by MoC

41

40

40

40

Actual

119

40

Shovel
Dumper
Dozer
Drill

Table 9.2: Norms and actual HEMM availability and utilization during Eleventh FYP
Equipment

Availability (%)

Utilization (%)

CMPDI Norms

Actual

85

78-85

Dragline

CMPDI Norms

Actual

Shovel
Dumper
Dozer
Drill

9.1.2

UNDERGROUND MINING

In UG mining, the basic equipment for transporting are either haulage or conveyor belts. Worldwide,
Longwall mining is used for UG mining due to higher outputs and productivity, safety related factors,
and to achieve improved recovery. The other method used is continuous mining.



26

Chapter 9: Coal Technologies

Content Deleted
9.3.2.1 FEW UPCOMING COAL PLANTS BASED ON SUPER CRITICAL TECHNOLOGY
Plant

Company

MW

State

Status

Ankulapatur power station
phase 1

VSF Projects

350

Andhra
Pradesh

Construction

Ankulapatur power station
phase 2

VSF Projects

135

Andhra
Pradesh

Planning

Pynampuram Thermal
Power Project Units 1 and
2

Thermal Powertech
Corporation

1320

Andhra
Pradesh

Advanced
development

Year

2014

More than 60 plants listed

9.3.4 ADVANCED ULTRA SUPERCRITICAL TECHNOLOGY
The government’s National Mission for Technology, the Advanced Ultra Super Critical (AUSC)
project, which could cost well over Rs 6,000 crore, will be put up by a joint venture of BHEL, NTPC

Content Deleted



27

Chapter 10: Coal Prices

10. COAL PRICES
10.1 DOMESTIC COAL PRICES
CIL meets around 80 percent of coal requirement for power sector in India and around 55 percent of
the country’s total energy requirement. Although its high-grade coal production is only around 5
percent of its total production, the overall impact of price would be huge on about 20 million tons
(mt) of coal produced by the company.

Content Deleted
Table 10.1: CIL thermal coal prices before and after revision (Rs/ton)
S.No.

1

GCV Bands
(Kcal/kg)

7000+

2

6700-7000

3

4300-4600

11

4000-4300

12

3700-4000

13

3400-3700

14

3100-3400

15

2800-3100

16

2500-2800

17

0

4600-4900

10

4870

*

4900-5200

9

Change
(%)

5200-5500

8

*

Old
Price

5500-5800

7

New Price after
revision on May 28
for sectors other
than power sector,
fertilizer and
defence

5800-6100

6

Change
(%)

6100-6400

5

Old
Price

6400-6700

4

New Price after
revision on May
28, 2013 for power
sector, fertilizer &
defence sector

2200-2800


4,870

4,870

0


4,870

28


Content Deleted
Source: CIL, Cerebral Business Research

10.3 INTERNATIONAL COAL PRICES TRENDS
Globally, coal prices have cooled off by 14-17 per cent over the last one year and prices are unlikely
to recover anytime soon as demand from China is down sharply.
Impact on tariff (INR / unit)

Pre 2009
2013-14

Post 2009
2014-15

2013-14

2014-15

MW
Pithead

INR /
unit

MW

INR /
unit

MW

INR /
unit

MW

INR /
unit

13,200

0.08

13,200

0.07

13,750

0.08

19,360

0.07

Coastal
Non-coastal non- pithead
Sub total (i)
Capacity commissioned in the
year 1 (ii)
Total Capacity (iii) = (i) + (ii)
Capacity considered for 2013-14

Impact on tariff (INR / unit)

2013-14

2014-15

2013-14

2014-15

MW
Pithead

INR /
unit

MW

INR /
unit

MW

INR /
unit

MW

INR /
unit

13,200

0.08

13,200

0.10

13,750

0.08

19,360

0.10

Coastal
Non-coastal non- pithead
Sub total (i)
Capacity commissioned in the
year 1 (ii)
Total Capacity (iii) = (i) + (ii)

Issues:
In case the pre 2009 plants of State Governments are excluded from pooling because of the



29


opposition from State Governments, pooling could be among all post 2009 plants and non-State pre
2009 plants. However, this option would raise the following issues that need consideration:

Content Deleted



30

Chapter 11: Coal Washeries

11: COAL WASHERIES
11.1 INTRODUCTION
Despite the massive coal reserves in India, the demand continues to widen its gap from supply as
coal production is progressing at a slow pace compared to fast rising coal demand. Due to geological
reasons, coal in India is characterized with high ash content and low calorific value. This further adds
on to the coal supply crisis along with rising
Table 11.1: Details of existing Coal Washeries by CIL, (as of April 30, 2013)
SI. No.

Washery

Capacity ( MTY)

Location

Consumer

Coking Coal
1

Dudga-II

2.00

Jharkhand

Steel Plants

2

Bhojudih

1.70

West Bengal

Steel Plants

3

Patherdih

1.60

Jharkhand

Steel Plants

12

Nandan

1.20

MP

Steel Plants

(A) Coking Coal, CIL

20.10

NON-COKING COAL
1

Dugda-I

1.00

Jharkhand

TPS

7

Bina

4.50

UP

TPS

(A) Non Coking Coal, CIL

20.20


Table 11.2: Details of existing Coal Washeries by Private Players, (as of April 30, 2013)
Washery Name

Type

Capacity
( MTY)

Location

Consumer

Player Name

DCOP

Coking Coal

1.35

WB

Steel Plants

DPL

Jamadoba

Coking Coal

1.72

Jharkhand

Steel Plants

TISCO


11.4 PERFORMANCE OF COAL WASHERIES IN OPERATION IN THE XI PLAN PERIOD
11.4.1 COKING COAL

Content Deleted



31

Chapter 11: Coal Washeries

Table 11.3: Details of Proposed coal washeries in India
Sl.no.

Subsidiary

Washery

Capacity(Mty)

Type

Scheme

1

ECL

Chitra

2.5

Non-coking

BOM

2

ECL

Sonpurbazari

8.0

Non-coking

BOM

3

BCCL

Madhuband

5.0

Coking

BOM

4

BCCL

Patherdih

5.0

Coking

BOM

5

BCCL

6

BCCL

7

BCCL

8

BCCL

9

CCL

10

CCL

11

CCL

12

CCL

13

CCL

14

SECL

15

SECL

16

MCL

17

MCL

18

MCL

19

MCL

20

WCL

TOTAL

111.1

Source: CIL Website

Content Deleted
Table 11.7: Ranking of States most suitable for Coal Washing
Indices
Rank

States

Ash
cont
ent

Total

Naxa
lism

Total

st

Jharkhan
d

5

1.25

1

0.15

nd

Orissa

4

1

2

0.3

rd

Chhattis
garh

th

MP

th

WB

1
2
3
4
5

Land
&
Wat
er

Total

Stat
e
flexi
bility

Total

Infra
struc
ture

Total

Coal
avail
abilit
y

Total

Sum




32

Chapter 12: Coal Scam Implications

12. COAL SCAM IMPLICATIONS
12.1 WHAT IS COALGATE SCAM
Between 1993 and 2011, the government of India gave away 206 coal blocks for free to government
and private companies. Estimates suggest that only 41 out of the 206 blocks given away for free
were allocated before the end of 2003. This means that 165 blocks were allocated between 2004
and 2011.
The UPA government has been in power since May 2004. Hence, a major number of coal blocks were
given away free during the UPA rule. The Government Auditor or the Comptroller and Auditor
General (CAG), in a recent report, estimated the losses due to the government’s policy of giving out
coal blocks for free to the tune of Rs1.86 lakh crore.

Content Deleted
12.2 BENEFITS TO THE PRIVATE PLAYERS
As per some estimates, a company saves 10 times from captive mining against buying coal from the
open market. For example to generate 1000MW of power, Rs. 250 crore / annum amount is needed
in case of captive coal and Rs 3240 crore per annum is required in-case coal is bought from the open
market.

Content Deleted
Table 12.1: Sector wise private players with captive blocks
Sector

Companies with captive blocks

No. of blocks allotted

Sponge &
Pig Iron

Abhijeet Infrastructure, Usha Martin, Bhushan Steel, Rungta Mines,
Neelanchal Iron, Bajrang Ispat, Electrosteel Castings, Domco Smokeless
Fuel, Tata Sponge,
Nalwa Sponge Iron, Topworth Urja & Metals

26

Power
Coal-toliquid
Cement
Steel
Source: CAG, Cerebral Business Research



33


12.2 BLOCKS ALLOCATION DETAILS AS HIGHLIGHTED BY CAG
STATE-WISE STATUS OF BLOCKS ALLOCATED AS HIGHLIGHTED BY CAG
As can be seen from the graphs, maximum number of blocks is allocated in Jharkhand (27) and
Chhattisgarh (13).

Content Deleted
State

West Bengal

Average GR per block (MT)

MP

Maharashtra

Chhattisgarh

Jharkhand

Orissa

77.5

Figure 12.2: Year wise, state wise no. of blocks allocated, from 2005-2009

3

4
6
1

10

2
1

4

7

5

3
2005

1
3

2006

2007

2008

1
2
2
2009

Source: CAG, Cerebral Business Research

12.3 ACTION TAKEN BY THE GOVERNMENT
Government has set up a review committee, naming Inter Ministerial Group (IMG), which has
shortlisted 58 companies whose coal licences are likely to be revoked for underperformance. The
group is scrutinising 29 blocks awarded to private firms out of the total 58 which were given showcause notices for delays in developing mines.

Content Deleted



34


Table 12.3: Blocks Recommended For Deduction of Bank Guarantee
S.NO

Company Name

State

Block Name

Date of
Allotment

Sector

Extractable
Reserve
(MT)

1

Usha Martin Ltd.

Jharkhand

Lohari

24-Aug-05

Steel

9.0

14

Monnet Ispat &
Energy *

Orissa

Utkal B2 Block


Most of the blocks recommended for deduction of bank guarantee are in the sponge iron category
(7 blocks), followed by four blocks in the Power sector.

Content Deleted
Table 12.4: Blocks Recommended for De-allocation by IMG
S NO

Company Name

State

Block Name

Date of
Allotment

Sector

Extractable
Reserve
(MT)

1

Bhusan Steel & Strips
Ltd. & Others

Orissa

New Patrapara

13-Jan-06

Sponge Iron

316.1

13

Maharashtra
Seamless, Dhariwal
Infrastructure and
Kesoram Industries

Maharashtra


The state of Jharkhand has the maximum number of blocks (5 blocks) been recommended by IMG
for de-allocation, closely followed by Chhattisgarh with 3 blocks. The rest of the states including
Maharashtra, Madhya Pradesh, West Bengal and Orissa have either one or two de-allocation
recommendations each.

Content Deleted
12.4 IMPACT OF DEALLOCATION
There is unlikely to be any kind of immediate impact on the economy. However, some impact in the
mid-term is quite likely. Many power projects, which are dependent on captive coal blocks from the



35


allocation, are likely to get delayed without assured supply of coal. If supply of electricity is affected,
there will be a cascading effect across the economy

Content Deleted



36

Chapter 13: Other Recent Developments

13. OTHER RECENT DEVELOPMENTS
13.1 COMPANY RELATED
Hindalco to buy coal from other sources for aluminium project in Odisha (Oct 2013)
Business Standard reported that Hindalco will have to buy coal from other sources at a very high
cost for its INR 17,000 crore aluminium project in Odisha, as its Talabira mine is yet to receive StageII clearances from the Union environment ministry.

Content Deleted
Indian coal mining scam - CBI recovers INR 25 crore cash from Hindalco (Oct 2013)
CBI said that a day after it lodged an FIR against Hindalco and its boss Mr Kumar Mangalam Birla, it
had recovered INR 25 crore in cash from the corporate office of the aluminum major in the city.

Content Deleted
Jindal to takes over ownership of Gujarat NRE Coking Coal (Oct 2013)
Jindal Steel will take over ownership of Gujarat NRE Coking Coal after a successful shareholder vote
recently.

Content Deleted
CIL production hit due to recent Cyclone (Oct 2013)
PTI reported that state owned CIL has suffered a production loss of about 1.2 million tonne in the
past 3 days on account of Cyclone Phailin which has affected the key coal producing states of
Odhisha, Jharkhand and West Bengal.

Content Deleted



37

Chapter 14: Company Profiles

CHAPTER 14: COMPANY PROFILES
14.1 COAL INDIA LTD
14.1.1 COMPANY OVERVIEW
•
•
•

Coal India Limited (CIL) as an organized state owned coal mining corporate came into being
in November 1975 with the government taking over private coal mines.
With a production of 79 Million Tonnes (MTs) at the year of its inception CIL today is the
single largest coal producer in the world.
Operating through 81 mining areas CIL is an apex body with 7 wholly owned coal producing
subsidiaries and 1 mine planning and Consultancy Company spread over 8 provincial states
of India.

Content Deleted
14.1.2 STRATEGIC VISION
The strategic vision of CIL is to place itself on a path of accelerated growth with enhancement in
productivity competitiveness

Content Deleted
14.1.3 SUBSIDIARIES OF COAL INDIA LTD:
1. Eastern Coalfields Limited (ECL), Sanctoria, West Bengal
2. Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand
3. Central Coalfields Limited (CCL), Ranchi, Jharkhand

Content Deleted
Existing Material Agreements/Joint Ventures/MOUs
•

Agreement between CIL and Indian Oil Corporation Limited, IBP Division ("IOCL-IBP") for the
supply of bulk loading explosives to our Subsidiaries.

Content Deleted
Products
•
•

Coking Coal
Cokin Coal



38


Content Deleted
Services:

Content Deleted
14.1.4 CIL PRODUCTION TRENDS
CIL accounted for about 81% of the total coal produced in the country during fiscal 2013. There
appears to be no shortage of market for the mineral, if it can be produced at a reasonable cost on a
sustainable basis.
Figure14. 1: CIL Raw Coal Production
Production of Raw Coal During 2003-04 to 2012-13
500
450
400
350
300
250
200
150
100
50
0

Source: CIL Annual Reports

Off Take of Raw Coal
Off-take of raw coal continued to maintain its upward trend and reached 465.18 million tonnes for
fiscal ended March 13, surpassing previous highest of 433.08 million tonnes achieved during the last

Content Deleted


39


Figure 14.2: Off take of Raw Coal from CIL

Content Deleted
Source: CIL Annual Reports

Content Deleted
14.1.5 CIL FINANCIAL HIGHLIGHTS
CIL is one of the largest profit making and tax & dividend paying enterprises in India.Aggregate pretax profits for CIL and its subsidiaries increased by 17.42% from Rs. 21,272.66 crores in 2011-12 to
Rs. 24,979.04crores for 2012-13.
Figure 14.3: Profit after Tax & Net worth of CIL

Content Deleted
Source: CIL Annual Report

14.1.5 SWOT ANALYSIS OF COAL INDIA LTD.
STRENGTH

WEAKNESS

Maharatna Status

Government Intervention

OPPURTUNITIES

THREAT

Operational Risks

Details of Strengths
Maharatna Status: The Company is the single largest coal producing company in the world. It was
awarded a Maharatna Status on 11th Apil 2011, becoming the fifth company to be awarded the
status. The Maharatna

Content Deleted
Details of Weakness



40


Government Intervention
Excessive government intervention in the operations of the company may be cause of concern for
the shareholders.

Content Deleted
Details of opportunities
Increasing Coal Demand
Rising coal demand provides an opportunity for the company to expand its operations. Coal is used
as a raw material in the production of steel.

Content Deleted
14.1.6 RECENT DEVELOPMENTS
CIL allots Rs 4000cr for overseas blocks Mon
Aug 12, 2013
Coal India has made a provision of Rs 4,000 crore as capital expenditure this fiscal to develop blocks
in Mozambique and acquire overseas assets. “The capital expenditure for 2013-14 has been
envisaged at Rs 5,000 crore plus an additional ad hoc provision of Rs 4,000 crore for the acquisition
of coal assets abroad and development of coal block in Mozambique,”

Content Deleted



41


ANNEXURE
Annexure 4.1: Details of Geological Reserves (Resource in million tonne)
State/ Coalfield/
Type of coal

Depth

Proved

Indicated

Inferred
(Exploration)

Inferred
(Mapping)

Total

GONDWANA COALFIELDS
WEST BENGAL
1. RANIGANJ
0-300
MEDIUM COKING

194.70

1.60

0.00

196.30

15.30

300-600

16.90

0.00

32.20

Total
0-300
300-600

SEMI-COKING

600-1200
Total

High Sulphur

0-300
TOTAL FOR DGM REPORT

TOTAL FOR NAGALAND

293.47
8.76

293.47

GRAND TOTAL

8.60

298.05

315.41

99.34

49.57

749.92

1492.64

118144.81

Total for Tertiary
Coalfields

0.00

593.81

Total for Gondwana
Coalfields

142168.85

32433.57

749.92

293497.15

117551.00

Note: Totals may not match since the contents are deleted

S. No.

Features

Pakri-Barwadih

Date of allotment
Mode of allotment

Features

Geo. Reserves (MT)
Mineable Res. (MT) (OC)
Est Capacity (MTPA)
End-use Project

H

Coal Production

11.10.04
Government
Dispensation
1436
503
15
Shortfall of:
Lara (4000 MW)
Darlipalli (3200 MW)
September 2013

ChattiBarwadih
25.01.06
Captive

Kerandari(*)
25.01.06
Captive

194
285
151.08
142.01
7
6
Barh St.-ll (1320 MW)
Tanda Expn, St-ll (1320 MW)
February 2015

August 2015

(*) Chatti-Bariatu, Kerandari & Chatti-Bariatu(S) coal mining blocks were de-allocated by Ministry of Coal on
June 14, 2011. Ministry of Coal has withdrawn the de-allocation and restored these coal blocks to NTPC on
January 23, 2013.

12.1 State wise status of blocks allotted (under COALGATE SCAM)
Chhattisgarh



42


Content Deleted

State wise status of blocks allotted- Jharkhand

Content Deleted
State wise status of blocks allotted- Orissa

Content Deleted
State wise status of blocks allotted- Others

Content Deleted



43

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Coal sector development in india sample

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