A

PROJECT REPORT ON

A STUDY ON SALES AND MARKETING OF COAL

AT

CENTRAL COAL FIELD LTD.

(RANCHI)

AS A PART OF PARTIAL FULFILLMENT FOR PGDM

By:

SHABNAM PRAVEEN

UNDER THE GUIDANCE OF

PROF. MANISHA PALIWAL

SINHGAD INSTITUTE OF MANAGEMENT

2O11-2012

1

DECLARATION

I, Shabnam Praveen the undersigned, hereby declare that the Project Report entitled

A Study on Sales and Marketing of Coal written and submitted by me to the Sihngad Institutes Pune, in partial fulfillment of the requirement for the award of degree of PGDM

Administration under the guidance of Prof. Manisha Paliwal is my original work and the

Conclusions drawn therein are based on the material collected by myself.

Place:

Date: SHABNAM PRAVEEN

MPM “B”

2

ACKNOWLEDGEMENT

Inspiration, Encouragement and Guidance forms the backbone to success.

The satisfaction that accompanies the successful completion of project would be incomplete without mention of those people who made it possible through guidance and encouragement

I would like to express my sense of gratitude to all those who helped me in so many ways in preparing the training project entitled “Training on Sales and Marketing of coal” in C.C.L. I am thankful to Mr. G. Purohit (G.M. HRD) of C.C.L Ranchi for permitting me to conduct the survey on this topic at C.C.L. I would also like to thank Mr. M.S. Bhutani Sr. Manager and Miss. Nishi (Sr. Sales Officer) under whose supervision and guidance I was able to complete this project.

Shabnam Praveen

3

PREFACE

Project work is an essential part of the post graduate diploma in management. I the training program the management students get into practicalities to learn how to work are done in the real life situation in the organization. It’s not only a learning process but also experiencing.

I was fortunate enough to get into my training from CCL. Ranchi. I achieved all the objectives which any trainee will seek to achieve in his/her internship programmed. The basic objective to training at an organization like Central Coalfield Limited. Is to get exposure in the orientation on HR accept. Moreover another objective was to enhance my managerial skills and I achieved all these objectives.

This study is carried out under partial fulfillment of PGDM course, The detailed information of study is given further in form of different chapters.

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INDEX

CHAPTER PARTICULARS PAGE NO.

01. INTRODUCTION

02. PROFILE OF THE ORGANISATION

03. RESEARCH METHODOLOGY

04. CONCEPTUAL BACKGROUND

05. DATA PRESENTATION,ANALYSIS AND INTERPRTAETION

06. FINDINGS AND CONCLUSION

BIBLIOGRAPHY

ANNEXURE

5

CHAPTER 1

INTRODUCTION

6

INTRODUCTION

Coal India Ltd :Indian coal at the pithead is the cheapest coal in the world with low sulphur content. Indian coal is eco-friendly; CIL’s business plan therefore aims primarily to translate these strong economic fundamentals of coal into prosperity for the country and the company.

With eight wholly owned subsidiary companies, operating is an many states; CIL’s activities comprehensively cover A to Z in Coal extraction.Identification of coal reserves, detailed exploration followed by projectisation, design and implementation of projects and optimizing operations in 465 existing underground and open cast mines, 17 beneficiation plants and one coal carbonization plant are some in CIL’s range of activities. CIL welcome private participation in coal beneficiation. Participation of international coal mining companies of development of underground coal mines with modern technology is also receiving CIL’s consideration.

The government of India, the sole owner of CIL, has sanctioned major policy support package which, besides restructuring government’s holding in the company, has progressively freed and coal prices administrative control. Coal Mining is also being open up to private investment.

COAL INDIA: Coal India Limited, the third largest coal producing company in the world, having about 6.4 lakh employees with headquarter in Calcutta is a holding company under Ministry of Coal, Government of India, for the entire coal industry in the country barring the coal Mines in Andhra Pradesh (which comes under the jurisdiction of Singareni Collieries Co, Ltd.(A public sector undertaking of Govt. of Andhra Pradesh) and the captive mines of TISCO, SAIL-IISCO & DVC. It was formed as a public sector undertaking in November 1975 for reorganizing the nationalized coal mines and ensuring integrated development of coal, the prime source of energy.

Coal India presently contributes 90% of the total coal production in India. Coal India currently operates mine and Washeries spread over nine states to produce and beneficiate coal for meeting the demand of the consumers all over the country. The ranges of products are: Raw Coal (Coking and Non Coking), Washed Coal, Middling’s, Soft coke &Hard Coke. Coal Tar Coal Gas Coal Chemicals etc.

CIL have now 8 subsidiaries viz. Bharat Coking coal Limited (BCCL),Central Coalfields Limited (CCL), Eastern coalfields Limited (ECL), Western coalfields Limited (WCL), South

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Eastern Coalfields Limited (SECL), Northern coalfields Limited (NCL), Mahanadi Coalfields Limited (MCL), and Central Mines Planning and Design Institute Limited (CMPDIL).

IMPORTANT EVENT

1. 1743 Commercial production of coal by East India Company for the manufacture of arms and ammunitions.

2. 1815 Opening of the first shaft mine near Raniganj town.3. 1843 M/S Carr. Tagore and other company amalgamated into the Bengal Company Ltd. This

was the first joint stock company in India4. 1853 Commencement of Railway service in India.5. 1855 Opening of railway from Calcutta to Raniganj, the turning point Coal industry for India.6. 1862 Coal mine began in central provinces Jharia Coalfields by Govt.of India undertaking 1st

phase of coal nationalization.7. 1956 Formation of National Coal Development Corporation Ltd.8. 1971 Coking Coal Nationalization.9. 1973 Non-Coking Coal Nationalization.10. 1975 Establishment of Coal India Ltd.(CIL)11. 1985 Northern coalfields limited (NCL) and south eastern coalfields Limited (SECL) carved

out of CCL and WCL.12. 1992 Mahanadi Coalfields Limited (MCL) formed out of SECL to manage the talcher and IB

Valley Coalfields in Orissa.13. 2000 De-regulation of Coal pricing and distribution of coal.14. 2007 Coal India & five of its subsidiaries viz, NCL,SECL, MCL,WCL, conferred “Mini

Ratna” status.15. 2008 Coal India accorded “Navratna” status16. 2011 Coal India accorded “Maharatna “ status

OBJECTIVE

8

1. To carry on business of coal mining. 2. Marketing of coal as main product3. Acquisition of Coal mining.4. Production, sale and disposal of Coal and bio-products.5. Exploration and prospecting.6. To manufacture and sell Coal as a patent fuel.7. To act as colliery and mine proprietors, coke manufacture in all their respective branches.8. Reorganization and reconstruction of Coal mines taken over by Government.9. Policy formulation and advisory functions.

SCOPE

The scope of the study is limited to the city of Ranchi only. And the number of respondents chooses was 60 who was surveyed at Central Coal field Limited in Darbhanga House Ranchi.

The scope of the study to know that to sales and marketing of coal and suggest accordingly and also for their production growth and it is essential for every organization to attain their goal is an effective manner and it should be done and it should be increase the performance of the present as well as with the new consumer. Sales and Marketing of coal process if done in proper way helps to increase organization productivity.

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CHAPTER 2

PROFILE OF THE

COMPANY

PROFILE OF THE ORGANISATION:

Name: CENTRAL COALFIELD LTD

Address: RANCHI

Location: CCL Headquarter Darbhanga House,

10

Ratu Road, Ranchi (Jharkhand)

Pin-834001

VISION

“Committed to create eco- friendly mining”

Being the domestic leader, CCL strive to be the leading international player in energy sector through best practices from mine to market.

MISSION

“To become a World class, Innovative, Competitive

& Profitable

Coal Mining Operation to achieve Customer

Satisfaction

As top priority”

• The Mission of CCL is to produce and market the planned quantity of coal and coal products efficiently and economically with due regard to safety, conservation and quality.

• The main thrust of CCL in the present context is to orient its operations towards market requirements maintaining at the same time financial viability to meet the resource needs.

HISTORY OF THE ORGANISATION

The Indian energy sector is largely dependent on coal as the prime source of energy. Coal mining first started in the year 1815. The private railway companies started mining activities in the year 1850. The railway board nationalized the coal mining in 1925. The railway collieries were transferred to the coal board in the year 1944.In the pre-nationalized era coal mining was controlled by private owners, and suffered from their lack of interest in scientific methods, unhealthy mining practices and sole motive of profiteering. The miners lived in sub-standard

11

conditions as well. After independence a greater need for coal production was felt in the First Five Year Plan. In 1951 a Working Party for the coal industry was set up, which suggested the amalgamation of small and fragmented producing units.

Coal mining through national sector first started w.e.f 01-10-1956 with the establishment of National Coal Development Corporation (NCDC). After nationalization of non-cocking coal sector in 1973 became the central division of Coal Mines Authority Ltd. Again in the year 1975 CMAL was re-organized as Coal India Limited (CIL). Central division of CMAL was known as Central Coalfields Limited (CCL). CCL was again re-organized in the year 1986 and two separate companies known as northern coalfields limited and Mahanadi coalfields limited came into existence. Before proceeding further it should be noted that CCL is a subsidiary of CIL and is completely owned and operated under their guidelines.

The objective of nationalization was the conservation of the scarce coal resource, particularly coking coal in India. Subsequently, in the context of safety, conservation and scientific development, the Government of India took over all coking coal mines on October 16, 1971 and nationalized them on May 1, 1972. Bharat Coking Coal Limited (BCCL) was thus born. Following the state takeover of non-coking coal mines, Coal Mines Authority Limited (CMAL) was formed in 1973, leading to the formation of a formal holding company- Coal India Limited- on November 1, 1975.

ADMINISTRATIVE SETUP

12

Chairman (Coal India Limited)

Board of Director+ CMD of all subsidiary (CCL)

13

Director

(Personnel)

Director

(Finance)

Director (Project & planning)

Director (Operation)

Deputy Chief Sales Manager

GM (Sales & Marketing)

Sales Manager

Deputy Sales Manager

Senior Sales Officer

Sales Officer

CHAPTER 3

RESEARCH

METHODOLOGY

RESEACH METHODOLOGY

TOPIC:” Study on Sales and Marketing of Coal”: with special reference to C.C.L, Ranchi.”

Research :A research is an organized set of activities to study and develop of model or procedure/technique to find the result of a realistic problem supported by literature and data such that its objectives is optimized and further make recommendation /interferences for implementations.

Research Methodology: A system of models, procedures and technique used to find the result of a problem is called a research methodology

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TYPES OF RESEARCH:

Descriptive Research: Descriptive research is a also called Statistical Research. The main goal of this type of research is to describe the data and characteristics about what is being studied. The idea behind this type of research is to study frequencies, averages, and other statistical calculations. Although this research is highly accurate, it does not gather the causes behind a situation. Descriptive research is mainly done when a researcher wants to gain a better understanding of a topic for example, a frozen ready meals company learns that there is a growing demand for fresh ready meals but doesn’t know much about the area of fresh food and so has to carry out research in order to gain a better understanding. It is quantitative and uses survey’s and panels and the also the use of probability sampling.

Descriptive research is the exploration of the existing certain phenomena.

EXPLORATRY Research: Exploratory Research is an initial research which analyzes the data and explores the possibility of obtaining as many relationships as possible between different variables without knowing their end- applications. This means that a general study will be conducted without having any specific end-objective expect to establish as many relationships as possible between the variable of the study..

DATA TYPE: Primary Data and Secondary Data.

Primary Data: The data collected from the field under the control and supervision of an investigator.

Sources:

a) Observation methodb) Personal interview.c) Telephone interview.d) Mail survey

Secondary Data:- Data collected from sources which have already created for the first-time use and future uses.

Sources:

a) Various Newspaperb) Various websites

Some b

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16

CHAPTER 4

CONCEPTUAL

BACKGROUND

MARKETING MIX

The marketing mix was first developed by McCarthy over 40 years ago. It was designed to suggest that we have a balance mix of marketing in our marketing plan.

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Element of the marketing mix-the 4 Ps

PRODUCT

Defining the characteristics of our product or service to meet the customer’ needs.

PRICE.

Defining on a pricing strategy. Even if we decide not to charge for a service, it is useful to realize that is still a pricing strategy. Identifying the total cost to the user (which is likely to be higher than the charge we make) is a part of the price element.

PROMOTION

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This includes advertising, personal selling (e.g. attending exhibitions), sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment). Public Relations are included within promotion by many marketing people (through PR people tend to see it as a separate discipline).

PLACE

Looking at location (e.g. of a library) and where a service is.

Since then other expert have looked at the marketing mix and suggested it is much deeper in that business success is driven by PEOPLE and PROCESS.

PROFILE OF THE PRODUCT

The primary product of CCL is coal. It produces different types of coal which are:-

COKING COAL:

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These coals, when heated in the absence of air, form coherent beads, free from volatiles, with strong and porous mass called coke.

1. These have coking properties2. Mainly used in steel making and metallurgical industries3. Also used for hard coke manufacturing

SEMI COKING COAL:

These coals, when heated in the absence of air, form coherent beads not strong enough to be directly fed into the glass furnace. Such coals are blended with coking coal in adequate proportion to make coke.

These have comparatively less coking properties than coking coal Mainly used as blend-able coal in steel making, merchant coke manufacturing and

other metallurgical industries

NLW COKING COAL:

This coal is not used in metallurgical industries. Because of higher ash content, this coal is not acceptable for washing in washeries. This coal is used for power utilities and non-core sector consumers.

NON- COKING COAL:

These are coals without coking properties.

1. Mainly used as thermal grade coal for power generation2. Also used for cement, fertilizer, glass, ceramic, paper, chemical and brick

manufacturing , and for other heating purposes

HARD COAL:

Hard coke is formed from coking/semi-coking coal through the process of carbonization.

Mainly used in metallurgical industries Also used in industrial plants utilizing furnaces

WASHED AND BENEFICIATED COAL:

These coals have undergone the process of coal washing or coal beneficiation, resulting in value addition of coal due to reduction in ash percentage.

Used in manufacturing of hard coke for steel making Beneficiated and washed non-coking coal is used mainly for power generation

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Beneficiated and non-coking coal is used by cement, sponge iron and other industrial plants

MIDDLINGS:

Middling’s are by-products of the three stage coal washing / beneficiation process, as a fraction of feed raw coal.

used for power generation Also used by domestic fuel plants, brick manufacturing units, cement plants, industrial

plants, etc.

REJECTS:

Rejects are the product of coal beneficiation process after separation of cleans and / or middling’s, as a fraction of feed raw coal.

Used for Fluidized Bed Combustion (FBC) Boilers for power generation, road repairs, briquette (domestic fuel) making, land filling, etc.

CIL COKE/ LTC COKE:

CIL Coke/ LTC Coke are a smokeless, environment friendly product of the Dankuni Coal Complex, obtained through low temperature carbonization.

Used in furnaces and kilns of industrial units Also used as domestic fuel by halwais, hotels, etc

COAL FINES / COKE FINES:

These are the screened fractions of feed raw coal and LTC coke / CIL Coke respectively, obtained from the Dankuni Coal Complex and other coke oven plants.

Used in industrial furnaces as well as for domestic purposes

TAR / HEAVY OIL/ LIGHT OIL / SOFT PITCH:

These are products from Dankuni Coal Complex using low temperature carbonization of non-coking coal in vertical retorts.

Used in furnaces and boilers of industrial plants as well as power houses, oil, dye, pharmaceutical industries, etc.

The parameters of classification of coal are:-

A. COKING COAL

Grade ParametersSteel-1 Ash not exceeding 15%

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Steel-2 Ash exceeding 15% but not exceeding 18%Washery-1 Ash exceeding 18% but not exceeding 21%Washery-2 Ash exceeding 21% but not exceeding 24%Washery-3 Ash exceeding 24% but not exceeding 28%Washery-4 Ash exceeding 28% but not exceeding 35%

B. NON COKING COAL

Grade UHV Range (Kcal/Kg) A Exceeding 6200 B Exceeding 5600 but not exceeding 6200 C Exceeding 4940 but not exceeding 5600 D Exceeding 4200 but not exceeding 4940 E Exceeding 3360 but not exceeding 4200 F Exceeding 2400 but not exceeding 3360 G Exceeding 1300 but not exceeding 2400

C. SEMI COKING COAL

Grade ParametersSemi Coking-1 Ash + moisture not exceeding 19%Semi Coking-2 Ash + moisture exceeding 19% but not exceeding 24%

D. ASSAM COAL

Grade UHV Range (Kcal/Kg) A 6200-6299 B 5600-6199

E.HARD COKE

Grade Ash %

By Product Premium Not exceeding 25%By Product Ordinary Exceeding 25% but not exceeding 30%Beehive Premium Not exceeding 27%Beehive Superior Exceeding 27% but not exceeding 31%Beehive Ordinary Exceeding 31% but not exceeding 36%

Presently CCL Has

Number of Mines 59 Mines(22 Underground& 37 Opencast Mines)

22

Washeries 7 Washeries4 Medium Coking Coal Washeries3 Non- Coking Coal Washeries

Workshop 1 Central workshop5 Regional workshop

Operating Coalfields 6 (East Bokaro, West Bokaro, North Karanpura, South Karanpura, Ramgarh & Giridih)

Coal Reserves (up to 600 meters)

Medium Coking Coal 14.023B.T

Non-Coking Coal 19.539B.T

Total Reserves 33.562B.T

Proved 16.006B.T(48% of total reserves)

Total Area of Operation 2600Sq.Kms

COAL RESERVES (UPTO 600 METRES)

23

PRICE

DOMESTIC PRICE FIXATION

Government of India deregulated the prices of Non-Coking Coal of grades A. B. & C. Coking coal and Semi/Weakly coking coal on 22. 03.1996. Subsequently, on 12.03.1997, Government of India deregulated the price of non-coking coal of grade D. Hard Coke and Soft Coke and also allowed Coal India Ltd. to fix coal prices for grade E,F &G till Jan’ 2000 once in every six months by updating cost indices as per escalation formula contained in the 1987 report of the Bureau of Industrial Cost & Price. With effect from 01.01.2000. CIL is free to fix the prices of such grades of coal in relation to the market prices.

Pursuant of the above. CIL fixed the prices of deregulated coal from time to time and last such revision has been made on 12.12.2007

Grade wise Basic Price of coal at the Pit-head excluding statutory levies for Run-of-mine (ROM) Non- Long-Flame Coal, Long Flame Coal, Coking Coal, Semi Coking coal, & Weakly Coking Coal, direct feed Coal, Assam Coal for various subsidiaries of CIL are tabled below:

Basic Price of Run of Mine Non-Long-Flame Non-Coking Coal

(In Rupees/Tone)

Field/Co. A B C D E F G

ECL(for 8 units vide Annex II)

1490 1340 1120 900 680 530 370

24

ECL/Mugma(for 16 units vide Annex IV)

1710 1520 1300 1080 860 640 420

ECL/ Rajmahal

- - - - 890 760 610

BCCL 1440 1310 1090 900 720 570 410

CCL 1470 1330 1110 910 720 570 410

NCL 1350 1220 1000 840 670 530 390

SECL 1190 1110 950 800 660 520 390

MCL 1160 1030 860 720 560 440 320

PROMOTION

Promotion is the development and discrimination of persuasive communication about the offer designed to attract customers and to persuade them to act. In its broadest sense it encompasses all selling activities, personal selling, sales promotion and publicity. A company may have a well designed product, with a price and a distribution system appropriate to its target market but if it is unable to reach that market then all its default will have been in vain.

To many consumers, promotion and selling are synonymous with marketing, but promotion certainly represents a large part of the marketing effort, but if it is of course only a part of the marketing mix. The way various element of marketing mix come together depends upon the marketing objectives of the organization and therefore promotional strategies must be made with

25

reference these objectives. This means that the rate of promotion in the marketing mix depends on the role of the other elements of the marketing mix.

There is a lot of promotional activities in CIL, in general and CCL, in particular. From time to time, they do advertise through media regarding the quantity, quality, place and price of coal available for sale. The different distribution medium is also notified to consumer through media to make it convenient for them to buy the right type of coal from the right place and on right price according to their equipment.

The company promotes the buyers by the service. The service provided to the customer at the time of bidding through spot e-auction and forward e-auction. Spot e-auction is held four times in a month & forward e-auction will be held quarterly for long term requirement of customer. Company registered in MSTC site according to terms and condition. After e-auction date the product dispatch to their customer. Seven days before buyers have to pay money for the e-auction.

WHAT’S NEW

New Initiatives taken by Coal India Ltd.

CIL, with an impressive track record in meeting energy needs by registering a growth in production in excess of 5% annually over the years, is aiming at playing a more purposeful role in establishing itself as the prime supplier of energy to the nation.

In this respect, CIL has not restricted itself within the conventional gamut of coal mining, but also exploring the possibility of expanding its horizon in harnessing the potential of non-conventional energy source as also to expand its pressure beyond the boundaries of our country.

The various initiatives, already taken in this direction are summarized below:

A. Coal Bed Methane (CBM)B. CIL is involved in 2 nos. of CBM projects:C. UNDP Demonstration project:

A demonstration project named “Coal Bed Methane” recovery & commercial utilization has been taken by the Govt. of India in collaboration with United Nations Development program & Global Environment Facility. The project had been sanctioned by Govt. of India during Sept, 1999 and the project is now under implementation at Sudamdih and Moonidih mines at BCCL. The present technical assistance project draws on the recommendation put forth in India’s ninth Five year plan recommending the development of new sources of energy. The UNDP-GEF

26

project will support recovery and use. Through representative demonstration plants, the project will introduce advanced techniques of gas resource assessment and recovery and also utilization methods relevant for India Coal-mining conditions. Drilling is in progress. First bore hole drilled up to 1059.30.

CIL ONGC JV:

Govt. of India through has allotted 3 blocks. Once in Raniganj and other in Jharia Coalfields approx. of 356 and 85 sq. km. respectively on nomination basis to the consortium of CIL and ONGC. Work is in progress. Petroleum Exploration License for both the blocks has been obtained from respective state Govt.

At Jharia, 8 no. of slim hole drilling from CIL end is complete since 30.12.2004 by deployment of 3 Rigs.

A total of 8703.65 MTs have been drilled since commencement. CBM related test has been carried out.

At Raniganj CBM block, drilling started on 26.05.2006 by deploying 2 drilling Rigs. One of CMPDI and one of NEC. A total of 3982.50 MTs have been drilled since commencement.

1. E-Marketing of Coal

The sale of Coal through e-auction scheme is considered to be the most rational system of sale of Coal through which it is at the same time objective, equitable, transparent and above all, beneficial to all those users of Coal who do not have official channel to purchase Coal, either because they are new units or because they were closed down and subsequently revived after fresh efforts and require Coal to start their operation.

PEOPLE (CUSTOMER)

TYPES OF CUSTOMER

1. Existing Customer2. New Customer

Following are the list of customer:-

1. Steel Industry 2. Power 3. Fertilizer4. Sponge Iron

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5. CPP (Captive power plant)6. Brick making7. Chemicals8. Paper9. Textile10. CPSU (central/public sector unit)11.State agency12.Other

AREA OF CCL:-

AREA SIDINGS1. BARKASAYAL- Bhurkunda, saunda, central, saunda, sayal

2. ARGADA- Gidi A, Gidi washery, Sirka

3. NORTH KARANPUARA- KDH, Dakra

4. RAJHARA-

5. PIPARWAR- Bachara, RCM(Rai, churi manki)

6. RAJRAPPA- Rajrappa Washery

7. KUJU- NR, Chainpur

8. HAZARIBAG

9. BOKARO & KARGALI- Jarangdih I, Gridih

10. DHORI- Selected dhori, tarmi, Dhori new

11. KATHARA- Jarangdih II

PLACE OF DISPATCH (SUPPLY) FROM CCL:-

1. Delhi2. Jharkhand3. Bihar4. Orissa5. West Bengal6. Punjab7. Haryana8. Utter Pradesh9. Jammu Kashmir

PLACE (COAL INDIA LIMITED)

28

1. Jharkhand2. Orissa3. Madhypradesh4. Chhattisgarh5. Assam 6. Maharashtra7. West Bengal8. Utter Pradesh

PRODUCTION, DISPATCH AND SALE

CCL has maintained an upward trend in production. The annual production of raw coal which was 15 million tonnes in 1973-74 (the year of nationalization) touched the level of 47.079 million tonnes in 2009-2010. The major challenge of increasing production however, came after the re-organization of CCL’s jurisdiction in 1986, when two of the major coalfields viz, Singrauli in M.P and Talchar in Orissa went out of its jurisdiction with nearly 40% of its annual production. With sustained efforts company has been achieving its annual growth in production for many years.

PRODUCTION OF COAL

Two types of coal mining are done for extracting coal:

1. UNDERGROUND MINING In some areas coal is present under deep layers of overburden. For extracting coal present at greater depth mining is done by underground method. Underground mining is of two types:-

i. SHAFT METHOD By shaft method, coal is extracted and removed from underground through lift. Men and material are also transported to the underground through lift. After the removal of coal empty place is filled with send. This method is used when coal is present at a depth greater than 300 feet.

ii. INCLINE METHOD By incline method of mining, a shallow hole is dug out and tunnels are made in various directions and coal is extracted from there. Men and material are also transported to the mine through conveyers. In this method explosives are used to break the surface. This method is used when coal is present at a depth greater than 10-150 feet.

2. OPENCAST MINING In some areas where coal is available near the surface, opencast mining is done to extract the coal. Overburden i.e. mud, rock etc is first removed by using shoves, dumpers etc and

29

then by blasting, coal is removed through Heavy Earth Moving Vehicles, which include Coal Cutting Machines, Shoves, Dumpers etc.

The extracted coal is stocked and periodical measurement is done by the Survey Department which functions under the Production Department. Overburden is also measured and recorded.

CUSTOMERS

1. POWER SECTOR State Electricity Boards- JSEB, HSEB, DVB, PSEB, UPRVUNL TVNL (Tenughat Vidyut) Nigam Ltd. NTPC (National Thermal Power Corporation) DVC (Delhi Vidyut Corporation)

2. STEEL SECTOR SAIL (Steel Authority of India Limited)

3. PRIVATE STEEL PARTIES TISCO IISCO & VSP

4. OTHERS Cement industries and other Private Parties.

SALE PROCEDURE

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Types of sale

Cash Sale (6 – 7%)

Credit Sale (92-93 %)

MODE OF TRANSPORTATION:-

1. Rail2. Road3. Belt4. Trolley5. Ropeway6. Merry go round

METHOD OF MINING:-

1. Open cast(32)2. Underground(31)

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METHOD OF LOADING:-

1. CHP2. Pay loader

WEIGHBRIDGE:-

1. Statics2. In motion

RAILWAY ZONE COVERED BY CCL:-

1. South eastern railway-Rajrappa

2. Central railway -Gridih

3. East central railway -Rest area

SECTOERWISE DESPATCH:-

32

2007-08 2008-09 2009-10 2010-11

RAIL 24478 25309 2585 23276

ROAD 2984 3579 182 6419

2500

7500

12500

17500

22500

27500

Power housein

000

tonn

es

Sector wise dispatch in tonnes.

2007-08 2008-09 2009-10 2010-11

RAIL 758 741 945 1304

ROAD 197 132 225 144

100

300

500

700

900

1100

1300

SPONGE IRON

33

2007-08 2008-09 2009-10 2010-11

RAIL 0 0 21 169

ROAD 53 54 57 49

1030507090

110130150170

CEMENT

2007-2008 2008-2009 2009-2010 2010-2011

ROAD+RAIL 40157 43026 43391 45820

37500

38500

39500

40500

41500

42500

43500

44500

45500

46500

G TOTAL

SECT

ORW

ISE

DESP

ATCH

Every year increase sector wise dispatch in tonnes

DISTRIBUTION (METHOD & PROBLEMS)

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FACTORS AFFECTING CHOICE OF TRANSPORT METHOD

1. The type of coal to be transported.2. The amount of coal to be transported.3. The distance to be transported.4. The facilities at the loading point.5. The facilities at the consumer’s premises.6. The access at the consumer’s premises.7. The number of transfers involved which may cause degradation of coal.

AVAILABLE MEANS OF TRANSPORT

1. RAIL Largest user including power sectors may be able to make use of rail transport which is often organized on a Merry Go Round System. Where the same rolling slack, designed for rapid loading and unloading, travels between supply point and consumer.

2. ROADSmall proportion of coal used by the industries is carried by road. The commercial vehicle use for this purpose differs mainly in the method of unloading.

3. WATER

In the past costal city and inland water ways were used extensively for transportation of coal, by this method has been almost superseded by the kind transport.

PROBLEM IN TRANSPORTATION OF COAL

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1. Railways2. Roadways

Problem in Railway Transport

Currently 75% of the total dispatches are by rail transport. Hence Railways are the most important means of transport of Coal & Coke. It is paradoxical that Coal India has added 6 million tons of coal to its slack, even when consumers were in distress due to the scarcity of Coal/Coke; Coal India officials blame railways for the latter’s inability to supply adequate no. of wagons. Passing the buck is a time honored preoccupation of the railways of Coal authorities. While railways speak man complain of loading of wagons, CIL officials periodically site instances when the railways send too many wagons to a particularly loading point on a day when workers are always on holidays and the complain in the next day at a press conference about scores of wagons lie unloaded.

Problem in Roadways Transportation

According to the estimates made by COAL INDIA about 20% of the dispatches are made by road. CIL does not encourage the road dispatches due to its certain disadvantages. The cost of sub stantially higher than the rail freight. Due to increase in the oil prices the cost of Road Transport has increased which ultimately affects in the increase of the landed price of Coal and Coke. Consumers whose requirement cannot be met due the poor wagons supply are constraints to life by road by paying higher prices. Road transport may not be considered uneconomical within a 100 km radius of pithead , but at a time when factories in North and South India, thousand miles away from pitheads, are transporting by truck, the current practice goes completely again the professed intension of the Govt. Energy Policy, which aims at minimizing oil consumption and maximizing coal consumption.

NEW COAL DISTRIBUTION POLICY

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As we already know that there are two types of sector i.e. core and Non-core. The CIL and Govt. of India approve the new coal distribution policy which is as follows:-

1) Classification of consumers:-Classification of consumers into core and non-core has been reviewed instead of each consumer would be treated in merit keeping in view, internal, the regular’s provisions applicable there to and other relevant factors.

2) Distribution and pricing of coal to different consumers sectors:-

Defense sector and railways will get total of the in coal requirement at notified price.

Power Utilizes, including independent power plants, captive power plants (CPP) and fertilizer sector 100% of quantity as per the normative requirement of the consumers would be considered for supply of coal , through fuel supply agreement (FSA) by coal India Ltd. (CIL) at fixed price to be declared. The units/ power plant which are yet to be commissioned but whose coal requirements has already been assessed and accepted by ministry of coal and linkage/letter of assurance (LOA) approved as well as future commitment would also be covered according.

3) Other Consumer:-75% of the quantity as per the normative requirement of the consumers/actual users would be considered for supply of through e-auction at notified price, to be fixed and declared by CIL. The remaining 25% of coal get by e-auction as their preference. At present small and tiny consumers in non- core sector, whose annual consumption is less than 500 metric tonnes are eligible to get through state agencies is 4200 tonnes per annum. If the quantity is more than 4200 tonnes per annum will take coal through Coal India Ltd.’subsidiary companies though FSAs. For the non-core sector and annual requirement is less than 4200 tonnes, they have to be entered in FSA by showing satisfaction level document of they to go state guises.

4) Small Consumers & medium consumers:- Small & Medium consumer like smokeless fuel, brick kiln etc.Have to be registered under FSA with coal companies by the state Govt. Agencies.Till further the state Govt. Notified the agency, the fuel supply agreement would be based on firm commitment and compensation for default in performance on either side.The price charged to such agencies would be same as notified price as applicable to other consumers. The agency may charge freight up to 5% Margin as service charge.The quantity allocated to this sector may be received on the basis of their performance in the beginning of every year. Allocation of quantity is based on consumption pattern in past.

5) Replacement of linkage system by Fuel Supply Agreement (FSA):-

If the buyers do not maintain continuation in FSA within six months in a year then they may be allocated the coal at auction price.

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6) Policy for new consumers:-

New consumers have to be allocated the coal after issuing letter of assurance (LOA) valid for 24 months for power sector. After issuing letter of assurance they have to enter into FSA and then FSA would be completed within three months. For allocation they have to deposit “Earnest money deposit” (EMD). If EMD failure occurs, then 5% of the value is kept.

7) Letter of assurance for new consumers:-

New Consumers from state, central power utilities, CPPS, Independent power producers, fertilizer LOA, are based on prevailing norms and recommendation of administrative ministry.

All other consumers may be issued LOA by CIL; Coal India Ltd. LOA will be issued by the CIL to the applicant consumers consequent upon payment of EMD to the coal company. The amount of EMD could be initially issued at 5% of the value of annual coal requirement. However, CIL may decide a different level, based on various facts, with the approval of board of directors. LOA will be valid for a period of 12 to 24 months as applicable and if after paying rejected the order then that amount will be forfeited.

8) E-auction of Coal:-

Coal distribution through e-auction was introduced with a view to provide access to coal for such consumers who are not able to source coal through the available institutional mechanisms for reasons like the seasonality of coal requirement, limited requirement of coal not warranting long term linkage etc. In long run, it is expected that e-auction may help in aerating Spot as well as future market of coal in the country so there is some fresh scheme of e-auction will be introduced.

a) Any buyer will be entitled to buy coal under auction.b) Coal Companies may be allowed to fix undisclosed reserve price not below the notified

price.c) E-auction should be announced well in advance and be given wide publicity to all

consumers who intend to participate.d) In order to address the concerns of such industrial consumers who wish to have an

assured supply over a long period, say one year, CIL will earmark a fixed quantity which will be provided to highest bidder/bidders as per bidder’s requirement during the time of bidding.

MARKETING POLICY

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Marketing is a very important branch of any organization. It plays the dominant role in the strengthening of the organization. In case of industry due to the monopolistic market scenario, Coal Marketing was not much of problem in the past. However, with the liberalization of the economy and easy availability of imported coal by many consumer, marketing is now playing a very important role in the entire operation activities of CIL/CCL.

CONSUMER OF COAL

Coal is a fossil fuel. It is used worldwide for generating power and is today one of the largest sources of power generation. Is the prime commercial energy source in India? Contributing over 90% of the total energy reduced and consumed. Coal India is perceived to be the synonym of Indian coal Industry. The observation about the global setting of the Coal sector is not fully reluctant in the Indian context.

SECTOR WISE DISPATCHES OF COAL AND ITS DIFFERENT BY-PRODUCTS DURING THE YEAR 2010-2011( in million tonnes)

Sector Raw coal Clean Coal Washed Coal

Coal Powder

Slurry Rejects

Steel 358 1398 34 889 - -Power 21592 - 8026 76 - 194Cement 218 - - - - -Fertilizers 945 - - - - -Sponge Iron 1448 - - - - -Others 3628 - - - 463 716Total 34.024 1398 8060 965 463 910

OFFTAKE:- THE TOTAL OFFTAKE DURING THE YEAR 2010-2011 WAS 46.288 (in million )

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OFFTAKE (Raw coal) Target Actual(000 tonnes)

Rail 31249 22315

Road 6001 11709

Internal Coking 3960 3022

Internal non Coking 8780 9172

Colly Con 10 10

Total 50000 46288

COMPETITIORS

The post nationalization years saw an increasing coal demand which created monopoly in coal. The managerial attitudes with ownership, with a demand for exceeding the level of production of CIL, and its the subsidiary organizations, performance within the Coal industry had also declined. There was little besides distribution of Coal that could be called True Marketing.

At present the coal industry is not under a major threat competition even with liberalization of different sectors. It is expected that carrying on with things as they are today, the coal industry shall remain in the monopoly position for much as a decade. It is after this, that the impact of govt., policy of liberalization shall be felt in its fullest strength. This is because; by this period, the private mines shall have positioned themselves in the open market. Liberalization in our country is still in its initial phase.

OBJECTIVES OF SCHEME

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To provide equal opportunity to all intending buyers for purchase of Coal/Coal products through single window service.

1. To provide wider choice of source, grade/ size, mode for all type of customer including small customers/ traders.

2. To facilitate creation of large no. of outlets across the country for all customer s through customer friendly system of sale of Coal/ Coal products making use of modern technology.

3. To evolve a market-driven Coal pricing mechanism through inter play of market forces demand and supply by shifting away from administrative price regime. Buyer can get access to Coal at self-determined prices.

4. To provide a legitimate channel of supply of Coal to an ever growing no. of new industries, non-linked consumers with snapped/ lapsed linkages, customer requiring Coal above their specified permissible quantities, if any, seasonal consumers such as brick manufactures. SSI & tiny industries, cottage industrial sector or any other buyers in distress and also buyers purchasing Coal for re-sale purchases.

5. Coal India proposes to increase allocation of Coal under e-marketing, so that the market mechanization of price determination based on supply and demand is judiciously established.

COAL VIDESH

In India, techno-economically recoverably reserve of good quality coking coal and high grade low ash non-coking coal are not adequate to meet indigenous requirement and thus import of such coal has been resorted to bridge the gap.

Since, demand of coal is increasing at a faster rate, it is felt necessary that CIL should venture for coal mining abroad, where such coal is available, to facilitate bridging the gap. With this objectives, it has been proposed to from a separate subsidiary company “Coal Videsh”. CIL Board has approved the proposal which needs approval of Govt. Meanwhile, a dedicated “Coal Videsh” dept. consisting of multi-disciplinary team has been opened in CIL. The team has started visiting South Africa, Mozambique and Zimbabwe to explore strategic business opportunities in these countries. CIL is also actively pursuing business intelligence activities by closely tracking the business opportunities in Australia, Indonesia and Russia.

COAL LIQUEFACTION

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Oil India Limited had approached CIL to become a partner in its venture of producing oil from coal in its Duliajan plant in Assam and requested for supply of about 3.5 Mt/annum of coal from NEC.CMPDIL has prepared a report on possibilities of producing 3.5 MTPA Coal from NEC, CIL and OIL held a meeting to discuss future possibilities on July 11, 2005 wherein OIL indicated that the tentative cost of production of oil obtained from this process is US $ 35 per barrel which appears to be quite attractive particularly in view of the burgeoning oil price in international market which has reached up to US $ 65 per barrel. It has decided to form a “Joint Task Force” of CIL which would study the CMPDI report for possibility of Coal production of 3.5 MT p.a. from NEC and examine enhancement of schedule of production , examine possibility of formation of 2 Joint Ventures, 1 for Coal production and other for setting up of Coal liquefaction plant and its upstream activities (IOCL may be considered as a party for the letter), and finally suggest a road map for implementation of proposed JV’s.

Underground Coal Gasification (UGC)

UGC is the in-situ gasification of Coal in the seam. It is achieved by injecting oxidants, gasifying the coal and bringing the product gas to surface through boreholes grill from the surface. The gas is used for power generation, industrial heating or as chemical feedback.

Coal India has given high priority to the issue of UCG. CIL and ONGC are likely to take up jointly a pilot project for establishing UGC technology. A MOU has been signed between CIL & ONGC ON 3rd Nov, 2005. Further drilling for additional data generation is one of the prospective which is been taken up. Initial work of data exchange, needed for identification of trial site, has already been taken up.

Over ground Coal Gasification (OCG)

Director (Planning and business development), GAIL (India) Ltd. May director (Technical) Coal India Ltd. On 20TH July, 2005 in connection with their interest to make a JV with CIL for evaluation of work in various Coal sector related potential opportunities.

A draft memorandum of corporation (MOC) has been drafted. MOC includes the scope of work for this JV in the field of over ground Coal Gasification. CIL and GAIL have taken up drawing of a road map to accomplish the objective jointly in right earnest.

Power Plant

CIL is also contemplating setting up of power plants in JV. In this connection, CIL is in negotiation, with both NLC & NTPC for power plant in Orissa.

Switchover – Categorization of Coal from UHF to GCV

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Efforts are being made to assess the possibility of making the categorization of Coal from UHF basis to GCV basis. Trials are being conducted at MCL & NCL results of which are yet to be obtained.

COAL NET

Coal India had taken initiative in development and implementation of COAL NET. Application S/w an integrated solution, to bring uniformity across its subsidiary companies and entrusted the activities to IIT, Kharagpur in the year 2001. The application s/w has been developed and implemented at CIL and its subsidiary (HQ’s). Necessary LAN has been set up at respective subsidiary (HQ’s) for COAL NET s/w. The same is being upgraded for faster access of application data.

Telecommunication links have been set up over satellite media (VSAT systems) and leased lines of BSNL interconnecting CIL HQ’s, Subsidiary HQ’s and Mock for voice, data and video conferencing in an integrated manner for seamless flow of information over the network. Similar rollout of from Subsidiary HQ’s to area offices, regional stores, projects, Coal loading points etc.

Considering significant role of telecommunication and IT in providing a proper decision support system at area level, CIL has been and MCL) for implementation of Coal Net application Software. Necessary infrastructure preparation has been carried by respective subsidiary and implementation is in progress. Initiative has been communication.

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CHAPTER 5DATA PRESENTATION,

ANALYSIS&

INTERPRETATION

DATA ANALYSIS

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Q.1.What according to you should be the most preferred way of the sales of coal.

SL.NO.

RESPONSE NO OF RESPONDENT PERCENTAGE OF RESPONDENT

A Credit sales 40 66.6

B Cash sales 20 33.3

TOTAL 60 100

33.3

16.6

WAY OF SALES

Credit salesCash sales

From this graph we concluded that most preferred the way of sales of coal through credit sales 33.3% and 16.6% through cash sales.

Q.2. Which method according to you is the most preferred way of Transportation.

SL.NO RESPONSE NO OF RESPONDENT PERCENTAGE OF

45

. RESPONDENT

A Rail 30 50

B Road 15 25

C Water 5 8.3

TOTAL 60 100

50

25

8.3

TRANSPORTATION SOURCES

RAILROADWATER

As per this graph 50% of respondents prefer Rail for transport of coal and 25% preferred Road and and 8.3% preferred through Water .

Q.3.Which method according to you is the most preferred way of extracting method of coal by CCL.

SL.NO. RESPONSE NO OF RESPONDENT PERCENTAGE OF RESPONDENT

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A Shaft Method 30 50

B Incline Method 15 25

C Opencast Method 15 25

TOTAL 60 100

50

25

16.6

EXTRACTING METHOD OF COAL

Shaft MethodIncline MethodOpencast Method

From this graph we conclude that 50% of respondents preferred Shaft Method and 25% Incline Method of and 16.6% through Opencast Method.

Q.4. Do you think that price of should be decrease according to need of coal?

SL.NO. RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

A YES 15 25

B NO 30 50

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C CAN’T SAY 15 25

TOTAL 60 100

25

50

25 YESNOCAN'T SAY

From the above graph we conclude that 50% of the respondents says that price of the coal should not be decreased while 25% of the respondents says that it should be decreased and 25% can’t say anything.

Q.5.What types of coal did you prefer?

SL.NO. RESPONSE NO OF RESPONDENT PERCENTAGE OF RESPONDENT

A Coking coal 35 58.3

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B Semi Coking Coal 15 25

C Non Coking Coal 5 8.3

D Others 5 8.3

TOTAL 60 100

58.325

8.3

8.3

TYPES OF COAL

Coking CoalSemi Coking CoalNon Coking CoalOTHERS

From this graph we conclude that 58.3% of respondent prefer Coking Coal and 25% Semi Coking Coal and 8.3% Non Coking Coal and others.

Q.6. Are you satisfied with the price of Coal by C.C.L.

SL.NO. RESPONSE NO OF RESPONDENT PERCENTAGE OF RESPONDENT

A Fully satisfied 25 41.6

B Satisfied 15 25

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C Not satisfied 10 16.6

D Can’t say 10 16.6

TOTAL 60 100

41.6

25

16.6

16.6

PRICE OF COAL

FULLY SASTIFIEDSASTIFIEDNOT SASTIFIEDCAN'T SAY

As per this graph we conclude that 41.6% of respondents are not satisfied with the price of Coal by CCL and 25% are satisfied and 16.6% are fully satisfied or can’t say.

Q.7. Are you satisfied with the Policy formulation and advisory functions by the CCL.

SL.NO. RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

A Yes 35 58.3

B No 20 33.3

C Can’t Say 5 8.3

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TOTAL 60 100

58.3

33.3

8.3

POLICY FORMULATION & ADVISORY FUNCTIONS

YESNOCAN'T SAY

From this graph we conclude that 58.3% of respondents are satisfied with Policy formulation and Advisory of company and 33.3% are not satisfied and 8.3% are can’t say.

Q.8.Do you realize that your competitors probably answered NO to even more questions than you did.

SL.NO.

RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

A Yes 25 41.6

B No 30 50

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C Can’t Say 5 8.3

TOTAL 60 100

41.6

50

8.3

COMPETITORS ANSWERD

YESNOCAN'T SAY

From this graph we conclude that 41.6% of the respondent says that yes and 50% says no and 8.3%says can’t say.

Q.9.Are you satisfied with Policy for new consumers?

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SL.NO. RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

A Yes 40 66.6

B No 20 33.3

TOTAL 60 100

66.6

33.3

POLICY FOR NEW CUSTOMER

YESNO

As per this graph we conclude that 66.6% respondents agree with policy for new customer and 33.3% are disagree.

Q.10.Are you satisfied with Reorganization and reconstruction of Coal mines taken over by Government.

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SL.NO. RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

A Yes 40 66.6

B No 20 33.3

TOTAL 60 100

As per this graph we conclude that 66.6% respondents satisfied with Reorganization & reconstruction of coal mines and 33.3% are disagree.

CHAPTER 6

FINDING

&

CONCLUSION

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FINDINGS

a) Consumers are classified into two types – New customer and Existing customer.b) Requirements of defence sector,power sectoer,IPP,Fertilizer,railways will be met in

full at notified price.c) Other FSA consumers get 75% of the quantity as per the normative requirement of

the consumers’ actual supply of coal requirement and rest of the 25% will be sourced by them through e-auction/import of coal etc.

d) Distribution of coal is done by railway and roadway from CCL.e) Non coking coal is more available in according to given data.f) The percentage availability of coking coal is 42%.g) The percentage availability of non-coking coal is 58%.h) Grade A coal’s quality is the best among them. That’s why it’s price is more than

other grade of coal.i) The letter of Assurance (LOA) to be issued now pursuant to the new policy will have

a validity of 24 months for consumers/applicants of power utilities.

j) Supply of coal to steal plant would be based on FSA. The price of Coal would be on the basis of coal import parity prising with suitable adjustment for quality. The

system is already vogue.

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CONCLUSION

Coal India is the third large coal producing Country, It gives opportunity to 4.25 lakh employees and their needing facility.

It also contributes in shaping the country by paying tax. The profit is also good but profit not shown of maximum. As I want to say something about the price release for the coal to the buyers. Per tonne price is very cheap and the buyers release the products at maximum price. As it is very good because company release a highest price than the coal related products like electricity price is more. As this is very good aspects that is under the govt. of India. If it is the under the private sector then he create monopoly in country. The coal distribution policy is very effective and auction is very interesting for the buyers. The Company also takes positives decision that is not involves in service to the buyers like transport; material handling Logistics supply chain etc. company gave time to receive the coal within 45 days.

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BIBLIOGRAPHY & REFERENCE

Books:-

I. Marketing Management- By Philip Kotler. Websites:-

I. www.coalindia.nic.in II. www.ccl.nic.in

III. www.google.com Reports:-

I. Departmental reports & Data

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