coal: choice for indian energy

7/30/2019 Coal: Choice for Indian Energy

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Coal - overview

COAL: CHOICE FOR INDIAN ENERGY

COAL is the most important and abundant fossil fuel in India. It accounts for 63% of the country'senergy need. The country's industrial heritage was built upon indigenous coal.

Commercial energy consumption in India has grown from a level of about 26% - 68% in the lastfour & half decades. The current per capita primary energy consumption in India is about 243kgoe/year which is well below that of developed countries. Driven by the rising population,expanding economy and a quest for improved quality of life, energy usage in India is expected torise around 450 kgoe/year in 2010. Considering the limited reserve potentiality of petroleum &natural gas, eco-conservation restriction on hydel project and geo-political perception of nuclear power, coal will continue to occupy centre-stage of India 's energy scenario.

With hard coal reserves around 206 billion tonnes, of which 75 billion tonnes are proven, Indiancoal offers a unique ecofriendly fuel source to domestic energy market for the next century andbeyond. Hard coal deposit spread over 27 major coalfields, are mainly confined to eastern andsouth central parts of the the country. The lignite reserves stand at a level around 26 billiontonnes, of which 90 % occur in the southern State of Tamil Nadu.

The Ministry of Coal has the overall responsibility of determining policies and strategies in respectof exploration and development of coal and lignite reserves, sanctioning of important projects of high value and for deciding all related issues.

Under the administrative control of the Ministry, these key functions are exercised through thePublic Sector Undertakings, namely, Coal India Ltd. and its subsidiaries and Neyveli LigniteCorporation Limited. Other than Coal India Ltd. and Neyveli Lignite Corporation Ltd., the Ministryof Coal also has a joint venture with Government of Andhra Pradesh called Singareni CollieriesCompany Limited. Government of Andhra Pradesh holds 51% equity and Government of Indiaholds 49 % equity.

Coal Mining in India: The Past

India has a long history of commercial coal mining covering nearly 220 years starting from 1774by M/s Sumner and Heatly of East India Company in the Raniganj Coalfield along the Westernbank of river Damodar. However, for about a century the growth of Indian coal mining remainedsluggish for want of demand but the introduction of steam locomotives in 1853 gave a fillip to it.Within a short span, production rose to an annual average of 1 million tonne (mt) and India couldproduce 6.12 mts. per year by 1900 and 18 mts per year by 1920. The production got a suddenboost from the First World War but went through a slump in the early thirties. The productionreached a level of 29 mts. by 1942 and 30 mts. by 1946.

After Independence, the Country embarked upon the 5-year development plans. At the beginningof the 1st Plan, annual production went upto 33 mts. During the 1st Plan period itself, the need for increasing coal production efficiently by systematic and scientific development of the coal industry

was being felt. Setting up of the National Coal Development Corporation (NCDC), a Governmentof India Undertaking in 1956 with the collieries owned by the railways as its nucleus was the firstmajor step towards planned development of Indian Coal Industry. Along with the SingareniCollieries Company Ltd. (SCCL) which was already in operation since 1945 and which became aGovernment company under the control of Government of Andhra Pradesh in 1956, India thushad two Government coal companies in the fifties. SCCL is now a joint undertaking of Government of Andhra Pradesh and Government of India sharing its equity in 51:49 ratio.

Nationalisation of Coal Mines



the needs of the domestic consumption. On account of the growing needs of the steel industry, athrust had to be given on systematic exploitation of coking coal reserves in Jharia Coalfield.

Adequate capital investment to meet the burgeoning energy needs of the country was notforthcoming from the private coal mine owners. Unscientific mining practices adopted by some of them and poor working conditions of labour in some of the private coal mines became matters of concern for the Government. On account of these reasons, the Central Government took adecision to nationalise the private coal mines.

The Nationalisation was done in two phases, the first with the coking coal mines in 1971-72 andthen with the non-coking coal mines in 1973. In October, 1971, the Coking Coal Mines(Emergency Provisions) Act, 1971 provided for taking over in public interest of the managementof coking coal mines and coke oven plants pending nationalisation. This was followed by theCoking Coal Mines (Nationalisation) Act, 1972 under which the coking coal mines and the cokeoven plants other than those with the Tata Iron & Steel Company Limited and Indian Iron & SteelCompany Limited, were nationalised on 1.5.1972 and brought under the Bharat Coking CoalLimited (BCCL), a new Central Government Undertaking. Another enactment, namely the CoalMines (Taking Over of Management) Act, 1973, extended the right of the Government of India totake over the management of the coking and non-coking coal mines in seven States including thecoking coal mines taken over in 1971. This was followed by the nationalisation of all these mineson 1.5.1973 with the enactment of the Coal Mines (Nationalisation) Act, 1973 which now is thepiece of Central legislation determining the eligibility of coal mining in India.

Production

India now ranks 3rd amongst the coal producing countries in the world. Average annualproduction growth rate during 1980's was about 6.5% as against global average of 2.3%. Most of the coal production in India comes from openpit mines contributing over 80% of the totalproduction. A number of large openpit mines of over 10 million tonnes per annum capacity are inoperation. Shovels with capacity upto 25 cu. m. , Dumpers upto 170 tonnes , Draglines upt 24/96capacity and inpit crushing conveying system are deployed in hard coal openpit mines. Largecapacity bucket wheel excavators are in operation for lignite mining.

Underground mining currently accounts for around 20% of national output. Most of the productionis achieved by conventional Bord and Pillar mining methods. Side by side , intermediate

technologies using Side Discharge Loaders (SDL) and Load Haul Dumpers (LHD) in Bord andPillar method of working have been introduced . Contemporary technology in the form of LongwallPowered support has also been introduced in a limited scale.

INVENTORY OF COAL RESERVES OF INDIA

As a result of exploration carried out down to a depth of 1200m by the GSI and other agencies, acumulative total of 220.98 billion tonnes of coal reserves have been established in the country ason 1.1.2001. These are as per the revised estimates of the Sub-Group-II on Coal and LigniteExploration for the Formulation of X Plan. The estimates as on 1.1.2002 are under finalisation atGSI.

The state-wise distribution and its categorisation are as follows:

(Reserves in Million Tonnes)

Andhra Pradesh 7529 5481 2452 15462

Arunachal Pradesh 31 11 48 90

Assam 259 27 34 320

Jharkhand 35148 28444 5583 69175

M.P./Chhattisgarh 14017 28222 7304 49543



M.P./Chhattisgarh 14017 28222 7304 49543

Maharashtra 4389 1368 1605 7362

Meghalaya 118 41 300 459

Nagaland 3 1 16 20

Orissa 11308 23729 16534 51571

Uttar Pradesh 766 296 0 1062

West Bengal 10846 10926 4147 25919

Total Coal 84414 98546 38023 220983

Categorisation of Reserves :

Formation-wise and category-wise coal reserves of India as on 1.1.2001(revised) are givenbelow:


Formation Proved Indicated Inferred TotalGondwana Coals 84002 98469 37625 220096

Tertiary Coals 412 77 398 887

Total 84414 98546 38023 220983

Type-wise and category-wise reserves are as follows:


Type of Coal Proved Indicated Inferred Total

(A) Coking :-

-Prime Coking 4614 699 5313

-Medium Coking 11294 11296 1036 23626

-Semi-Coking 482 907 221 1610

Sub-Total Coking 16390 12902 1257 30549

(B) Non-Coking* 68024 85644 36766 190434

Total(Coking & Non-Coking) 84414 98546 38023 220983

* Including coals of North Eastern Region.

Status of Reserves During Last Five Years : The estimates of coal reserves in the countryduring last 5 years is given below:


As on Proved Indicated Inferred Total

1.1.1998 75118 89079 42042



1.1.2000 82396 89501 39697

1.1.2001 84414 90242 39250

1.1.2001(Revised by Sub-Group-II) 84414 98546 38023

1.1.2002 Under finalisation at GSI

Source: Department of Coal

Grades of Coal Available

Coking Coal

SC-1/A

WG-I

WG-II

WG-III

WG-IV

S-I

S-II

W-I

W-II

W-III

W-IV

SLVMED(MET)WCL

MED(NON-MET) WCL

SC-I(COKING)SECL

NLW Coal

NLW-I

NLW-II

NLW-III

NLW-IV

Non Coking

A

B

C

D

E

F

WASHERIES - LOCATION & RATED CAPACITY

Company Name of State Rated Capacity (Tonnes Per Hour)

Dugda -I Bihar 680.000

Dugda-II Bihar 600.00

Bhojadih Bihar 300.000

Patherdih Bihar 500.000

B.C.C.L Lodna Bihar

Sudamdih Bihar 550.000

Borora Bihar 250.000

Moonidih Bihar 200.000

Total 3080.000

Company Name of State Rated Capacity Tonnes Per Hour)



Kargali Bihar 70.00

Kathara Bihar 715.000

C.C.L Swang Bihar 200.000

Gidi Bihar

Rajrapa Bihar 3080.000

Total 985.000

Company Name of State Rated Capacity (Tonnes Per Hour)W.C.L Nanda M.P. 200.000

C.I.L 4265.000

D.S.P.W W.B. 350.000

Other D.P.LW W.B. 360.000

Chasnala Bihar 715.000

Total 1425.000

Company Name of State Rated Capacity (Tonnes Per Hour)

Public 5990.000

W.Bakaro-I Bihar 150.000

TISCO W.Bakaro-II Bihar 450.000

W.Bakaro-III Bihar 400.000

Jamadoba Bihar 380.000

Total 1380.000

GRAND TOTAL 7070.000

Number of Coal Mines

The existing coal companies of the country and the number of working coal mines operated bythem as on 31.3.99 are given below:-

Company Number of working mines *

ECL 122

BCCL 87

CCL 55

NCL 09

WCL 87

SECL 87

MCL 22

NEC 06

CIL (Total) 475

SCCL 69



TISCO 07

IISCO 03

DVC 01

Bihar State Mineral Development Corporation Ltd. 01

J & K Minerals Ltd. 03

Bengal Emta Coal Mines Ltd. 01

Jindal Strips Power Ltd. 01

Total 561

Details of distribution of coal mines in the country—companywise (1998-99)

Companies Number of Mines

OC UG Mixed Total

ECL 22 100 0 122

BCCL 13 50 24 87

CCL 25 13 17 55

NCL 09 0 0 09

WCL 30 52 05 87

SECL 17 69 01 87

MCL 13 09 - 22

NEC (Unit directly controlled by CIL) 02 04 0 06

Coal India Limited 131 297 47 475

Singareni Collieries Co. Ltd. 10 59 0 69

Bihar State Mineral Development Corporation Ltd. 01 0 0 01

Damodar Valley Corporation 01 0 0 01

Indian Iron & Steel Co. Ltd. 01 01 01 03

J & K Minerals Ltd. 0 03 0 03

Bengal Emta Coal Mines Limited 01 0 0 01

Jindal Steel & Power Limited 01 0 0 01



Tata Iron & Steel Company Ltd. 01 06 0 07

Total number of coal mines 147 366 48 561

Distribution of coal mines by type—State-wise (1998-99)

State Number of Coal Mines

OC UG Mixed Total

Andhra Pradesh 10 59 0 69

Assam 02 04 0 06

Bihar 49 79 41 169

Jammu & Kashmir 0 03 0 03

Madhya Pradesh 26 95 06 127

Maharashtra 27 26 0 53

Orissa 13 09 0 22

Uttar Pradesh 04 0 0 04

West Bengal 16 91 01 108

Total Coal Mines 147 366 48 561


COAL PROJECTS

PROJECTS SANCTIONED DURING 2001-02 TILL 31-12-2001

During the year 2001-02, no new project has been sanctioned in the coal sector by theGovernment till 31-12-2001. The list of the Revised Project Reports /Revised Cost Estimatessanctioned by the Government is given below :

Sl. No. Name of the Project Company Capacity

(Mty)

Capital Cost

(Rs. Crs.)

1 K.D.Hesalong Expn. OC RPR CCL 4.50 316.12

2 Parej East OC RPR CCL 1.75 162.88

3 Dudhichua Expn. OC RCE NCL 10.00 1281.39



Total 16.25 1760.39

Up-to-date position of Projects each costing Rs. 2.00 Crs. & above sanctioned sincenationalization and upto 31-12-2001 is as under :

MINING PROJECTS

Company More thanRs 100 Cr.(no.)

Rs 100 -20 Cr (no.)

Rs 20 -2Cr. (no.)

Total(No.)

SanctionedCost (Rs Cr)

UltimateCapacity(Mty)

ECL 6 6 42 54 3363.64 39.12

BCCL 3 5 58 66 1462.10 30.29

CCL 5 10 47 62 2643.13 53.94

NCL 7 5 3 15 5215.60 50.60

WCL 1 35 57 93 2690.89 44.20

SECL 3 34 50 87 2834.59 65.21

MCL 7 7 7 21 1836.89 45.00

CIL 32 102 264 398 20046.84 328.36

SCCL 9 21 41 71 3961.12 40.963

As on 31-12-2001, out of total 398 mining projects of CIL, each costing Rs.2.0 Crores and above,319 projects stand completed ( including projects where coal reserve has since been exhausted ).Out of remaining 79 projects under various stages of implementation, 45 are on schedule and 34are delayed. In SCCL out of total 71 mining projects, 46 projects have been completed. Out of theremaining 25 projects 15 are on schedule and 10 are delayed. The Company-wise position is asfollows :

ON Going ProjectsCompany Total No. of Projects

No. of CompletedProjects

Total Onschedule

Delayed

ECL 54 41 13 3 10

BCCL 66 60 6 1 5

CCL 62 44 18 5 13

NCL 15 12 3 3 -



WCL 93 78 15 11 4

SECL 87 66 21 19 2

MCL 21 18 3 3 -

CIL 398 319 79 45 34

SCCL 71 46 25 15 10

STATUS OF PROJECTS MONITORED AT THE GOVERNMENT LEVEL

At the Government level projects each costing Rs.20 Crores and above are being monitored. Ason 31-12-2001, there are 63 such projects (mining & non-mining) under implementation at CoalIndia Limited (CIL) Singareni Collieries Company Limited (SCCL). Summarised position of these

63 ongoing projects is as follows:

Company No. of Projects

SanctionedCapital

(Rs. Crores)

UltimateCapacity

(Mty)

No. of ProjectsOn Schedule

No. of ProjectsDelayed

CIL 50 6596.22 51.37 35 15

SCCL 13 885.42 10.10 11 2

Total 63 7481.64 61.47 46 17

Identification of Captive Mining Blocks for Power Generating Companies and CompaniesEngaged in the Manufacture of Iron & Steel and Cement

Under the Coal Mines(Nationalisation) Act,1973 coal mining is exclusively reserved for the publicsector. By an amendment to the Act in 1976, two exceptions to this policy were introduced viz.(i)captive mining by private companies engaged in production of iron and steel and (ii) sub-lease for coal mining to private parties in isolated small pockets not amenable to economic developmentand not requiring rail transport, were allowed. Considering the need to augment power generationand to create additional capacity during the VIII Plan period, the Government decided to allow

private participation in the Power Sector. The Coal Mines (Nationalisation) Act,1973 wasamended w.e.f. 9.6.1993 to allow private sector participation in coal mining for generation of power, for washing of coal obtained from a mine or for other end uses to be notified byGovernment from time to time in addition to the existing provision for the production of iron andsteel. Mining of Coal for production of cement has also been permitted by the Government videnotification dated 15.3.96.

2. Considering the need to augment power generation and to create additional capacity duringthe Eighth Plan the Government took a decision in 1992 to allow private sector participation in thepower sector. Consequently, it became necessary to provide for coal linkages to power generating units coming up in the private sector. Coal India Limited and Neyveli Lignite



Corporation Limited, the major producers of coal and lignite in the public sector, wereexperiencing resource constraints. A number of projects could not be taken up in a short span of time. As an alternative it was proposed to offer new coal and lignite mines to the proposed power end use. Washeries have to be encouraged in the private sector also, to augment the availabilityof washed coal for supply to steel plants, power houses etc.

3. Coal India Limited and Singareni Collieries Company Limited have identified number of coalmining blocks for allocation to private / public sector for captive mining.

4. The following are the guidelines adopted for allocation of blocks to the public / private sector for captive mining :-

(i) An application for mining of a coal block for quantity less than1 mtpa in opencast mining and less than 250,000 tonnes per annum in underground mining would not be entertained so as toensure economic / scientific mining of Indian coal.

(ii) Preferably blocks in green field areas where basicinfrastructure like road, rail links, etc. is yet to be develop edshould be given to the public/ private sector. The areas whereCIL has already invested in creating such infrastructure for opening new mines should not be handed over to the privatesector, except on reimbursement of costs.

(iii) The blocks offered to private sector should be at reasonabledistance from existing 'mines and projects of CIL in order toavoid operational problems.

(iv) Blocks already identified for development by CIL whereadequate funding is on hand or in sight should not be offered tothe private sector.

(v) Public/private sector should be asked to bear full cost of exploration in these blocks which may be offered.

(vi) For identifying blocks, the requirements of coal for about 30years would be considered.

(vii) The other requirements are:

(a) approval of mining plan as required under the Mines and Minerals (Regulation andDevelopment) Act,1957.

(b) inspection for an appropriate enforcement of conservation measures by the Coal Controller under the Coal Mines (Conservation andDevelopment)Act, 1974 with a view to ensuringscientific mining.

(c) enforcement of safety regulations by theDirectorate General of Mines Safety.

5. A Screening Committee under the Chairmanship of Additional Secretary(Coal) comprising of representatives from Ministry of Railways, Ministry of Power, Concerned State Governments,



Ministry of Steel, Department of Industrial Policy & Promotion (Ministry of Industry), CoalController, Coal India Ltd., CMD's of concerned subsidiary companies of CIL, CMD, NLC asmembers has been set up in the Ministry for screening the proposals received for captive mining.

Details of captive mining blocks which stand allotted as on 28.11.2001

Sl.

No.

Name of the party Date of

allotment

Block allocated End Use

1 M/s RPG Industries/ CESC Ltd 10.08.1993 Sarisatolli Power Generation

2 M/s Kalinga Power 10.08.1993 Utkal-A Power Generation

3 M/s INDALCO 25.02.1994 Talabira-I Power Generation

4 M/s WBSEB 14.07.1995 Tara(East) Power Generation

5 M/s SAIL 26.02.1996 Tasra Steel Production

6 M/s WBPDCL 17.04.1996 Tara(West) Power Generation

7 M/s Talcher Mining Pvt. Ltd/VPL

02.02.1996 Utkal-B1 Power Generation

8 M/s BLA Industries 21.06.1996 Gotitoria(East) Power Generation

9 M/s BLA Industries 21.06.1996 Gotitoria (West) Power Generation

10 M/s Jindal Strips Ltd 20.06.1996 Gare-Palma-IV/1

Sponge IronProduction

11 M/s Monnet Ispat 21.06.1996 Gare-Palma-IV/5 Sponge IronProduction

12 M/s Lloyds Metals 912.1997

29.5.1998

Takli-Jena-Bellore (North)


13 M/s Central Collieries 29.5.1998 Takli-JenaBellora(South)

Power Generation-cum-washery

14 M/s Jindal Power Ltd 01.7.1998 Gare-Palma-IV/2

Power Generation

15 M/s Jindal Power Ltd 01.7.1998 Gare-Palma-IV/3

Power Generation

16 M/s Utkal Coal Ltd. (formerlyICCL)

29.5.1998 Utkal-C Power Generation

17 M/s Jayaswal Neco Ltd 16.8.1999 Gare-Palma-IV/4




18 M/s Monnet Ispat 16.8.1999 Utkal-B2 Sponge IronProduction

19 M/s Garuda Clays Ltd 25.4.2000 West of Umaria(Provisional)

CementProduction

20 M/s Jayaswal Neco Ltd 25.4.2000 Choritand-Tiliya(Provisional)

Steel Production/Captive Power Plant

21 M/s Jayaswal Neco Ltd 25.4.2000 Jogeshwar (Provisional)

Steel Production/Captive Power Plant

22 M/s Prakash Industries Ltd 25.4.2000 Chotia(Provisional)


23 M/s Raipur Alloys & Steel Ltd 25.4.2000 Gare-Palma-IV/7

Sponge IronProduction/Captive Power Plant

24 M/s B.S. Ispat 25.4.2000 Marki-Mangli Sponge IronProduction

25 M/s.Orissa Mining Corpn.Ltd. 10.7.2001 Utkal-D Power Generation

26. M/s. Punjab State ElectricityBoard

9/10.7.2001 PachwaraCentral

Power Generation

27. M/s. GVK Power (GoindwalSahib) Ltd.

28.11.2001 Tokisud North Power Generation


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coal: choice for indian energy

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