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INDIA 2012

A REFERENCE ANNUAL

Compiled by

RESEARCH, REFERENCE AND TRAINING DIVISION

PUBLICATIONS DIVISION

MINISTRY OF INFORMATION AND BROADCASTING

GOVERNMENT OF INDIA

COAL

The Ministry of Coal has the overall responsibility of determining policies and strategies in respect of exploration and development of coal and lignite reserves, sanctioning of important projects of high value and for deciding all related issues. These key functions are exercised through its public sector undertakings, namely, Coal India Limited (CIL) and Neyveli Lignite Corporation Limited (NLC) and Singareni Collieries Company Limited (SCCL), a joint sector undertaking of Government of Andhra Pradesh and Government of India with equity capital in the ratio of 51:49.

Coal and Lignite Reserves in India

The coal reserves of India up to the depth of 1200 meters have been estimated by the Geological Survey of India at 276.81 billion tonnes as an 1.4.2010. Coal deposits are chiefly located in Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Andhra Pradesh and Maharashtra. The Lignite reserve in the country has been estimated at around 39.90 billion tonnes as on 31.3.2010. The major deposits of Lignite reserves are located in the state of Tamilnadu. Other States where lignite deposits have been located are Rajasthan, Gujarat, Kerala, Jammu & Kashmir and Union Territory of Puduchery.

Coal Conservation

Conservation of coal is an important area particularly when our coal reserves are finite. The aspect of conservation of coal is taken into account right from the planning state and maximum recovery is ensured during the implementation stage. Mines are designed to work the coal seams either through open cast or through underground methods depending on the technical feasibility and economic viability. Mechanised opencast (OC) mining is presently the commonly adapted technology for extraction of thick seams at shallow depth. This is also important from the conservation point of view since the percentage recovery by this technology is around 80% to 90%. Presently, this technology dominates and coal industry contributing more than 88% of country's coal production. Further, whenever it is feasible, the developed pillars of underground mines are being extracted through opencast operations.

In case of underground (UG) mining, the introduction of new technologies like the longwall method, shortwall method, blasting gallery technology and continuous miner technology have resulted in increased percentage of extraction. With the improvement in roof support technology with mechanized bolting with resin capsules, it has been possible to maintain wider gallery span and extract seams under bad roof conditions more efficiently resulting in improved conservation of coal. The Ministry of Coal (MoC) governs the Coal Mines (Conservation & Development) Act 1974 for conservation of coal and development of mine areas through Coal Controller Organisation. A stowing excise duty of Rs. 10/- per tonne is collected on coal production/despatch and coal companies are extended assistance for undertaking conservation measures.

SAFETY AND WELFARE

The problems of subsidence and fires are the result of unscientific mining carried out by the earstwhile mine owners over more than 200 years of operations in these coalfields of Jharia and Raniganj prior to nationalisation. The population living in the old mining areas has increased many times over the years, though these areas became unsafe for habitation. Inspite of the declaration of these areas unsafe by the local administration, the habitation increased unabated.

The problem of subsidence and fire are being addressed by the Government from time to time. In this regard a High Level Committee was set up in December, 1996 under the Chairmanship of the then Secretary, Ministry of Coal with representatives from other Departments, Coal Companies and the concerned State Governments to deal with the problem in a comprehensive manner. Based on the recommendations of the Committee, a Master Plan was prepared to deal with the problems of fire and subsidence and related rehabilitation covering the areas under Bharat Coking Coal Ltd. (BCCL) and Eastern Coalfields Ltd. (ECL) in 1999 for implementation of the same in a phased manner.

The Government has approved the Master Plan dealing with fire, subsidence and rehabilitation and diversion of surface infrastructure within the leasehold of Bharat Coking Coal Limited (BCCL) & Eastern Coalfields Limited (ECL) on 12th August 2009 at an estimated investment of Rs 9773.84 crore [7112.11 crores for Jharia Coal Field (JFC) and 2661.73 crores for Raniganj Coal Field (RCF]. This includes Rs 116.23 crores sanctioned earlier for various Environmental Measures & Subsidence Control (EMSC) schemes for implementation in ten years, time.

Coal India Limited

CIL the holding Company with headquarters in Kolkata. CIL is mainly responsible for laying down corporate objectives, approving and monitoring performance of subsidiary companies in the fields of long-term planning, conservation, research and development, production, sales, finances, recruitment, training, safety, industrial relations, wages, material for all operational, acquisition of land, execution of welfare programmes, maintenance of safety standards, improvement of industrial relation, etc.

Neyveli Lignite Corporation Limited

NLC was registered as a company on 14th November 1956. The Mining operations in Mine-I were formally inaugurated on 20th May 1957 by the then Prime Minister Pandit Jawahar Lal Nehru. Neyveli Lignite Corporation has been conferred with "Miniratna" status. NLC presently operates four open cast lignite mines, viz., Mine 1, Mine IA & Mine II in the State of Tamilnadu and Barsingsar Mine in the State of Rajasthan aggregating to a total capacity of 30.6. MTPA and three thermal power stations, viz., TPS-I & TPS-I Expansion and TPS-II with a capacity of 2490 MW all located in Tamil Nadu, and Barsingsar TPS in the State of Rajasthan (250 MW) and TPS-II Expansion at Neyveli (500 MW) are under implementation aggregating to a total of 3240 MW.

Allotment of coalfields to private parties

1992 guidelines

Ministry: Coal allocations breached 1992 guidelines

Dhananjay Mahapatra TNN

The Times of India 2013/09/24

The Coal Bearing Areas (Acquisition and Development) Act, 1957 has a notification in favour of [government-owned] Coal India Ltd subsidiaries

Coal India Ltd board’s guidelines laid down in August 1992 were:

• Blocks already identified and allotted should be a virgin block without basic facilities. Wherever CIL has already invested in the creation of infrastructure, new mine should be operated by CIL

• The blocks offered should be away from existing mines and operating coalfields of CIL

• Blocks already decided for development by CIL should not be offered for private mining

• Consumers or private sector should bear the full cost of exploration incurred by CIL, CIL and Central Mine Planning and Designing Institute Ltd (CMPDIL).

2013 methodology

Cabinet approves methodology for coal blocks auction

PTI [1]| Sep 24, 2013

Coal blocks will be put for auction after the environment ministry reviews them and bidders have to agree to a minimum work programme.

"CCEA has approved the methodology for auction by competitive bidding of the coal blocks. The methodology provides for auctioning the fully explored coal blocks and also provides for fast tracking the auction by exploration of regionally explored blocks," an official statement said.

The policy will ensure greater transparency and will pave the way for the government to auction explored blocks.

"The process of bidding of coal blocks will be started very soon. The government has fulfilled its commitment to bring transparency in the allocation of coal blocks," coal minister Sriprakash Jaiswal told . A source said six explored blocks will be auctioned first, with estimated reserves of over 2,000 million tonnes. The policy provides for production-linked payment on a rupee per tonne basis, plus a basic upfront payment of 10 per cent of the intrinsic value of the coal block.

The intrinsic value will be calculated on the basis of net present value (NPV) of the block arrived at through the discounted cash flow (DCF) method, the statement said. "To benchmark the selling price of coal, the international FoB (freight-on-board) price from the public indices like Argus/Platts will be used by adjusting it by 15 per cent to provide for inland transport cost which would give the mine mouth price," it said.

To avoid short-term volatility, the average sale price will be calculated by taking prices of the past five years. For the regulated power sector, a 90 per cent discount will be provided on the intrinsic value. This will help to rationalise power tariffs, the government said. To ensure firm commitment, there will be an agreement between the ministry and the bidder to perform minimum work programmes at all stages. There would be development stage obligations in terms of milestones to be achieved such as getting mining leases and obtaining environment/forest clearances, while the bidder will have to give performance guarantees. The policy also provides for relinquishment of a block without penalty if the bidder has carried out the minimum work programme stipulated in the agreement.

According to the statement, the ministry of environment and forests will review details of coal blocks and communicate its findings before the areas are put to auction. Final clearances will be subject to statutory approvals.

The government said exploration activities in identified blocks are at an advanced stage and are likely to be completed soon. They will be auctioned under the Competitive Bidding of the Coal Mines Rules, 2012, according to the statement.

Shortage---and imports

`Waive green nod to extract more coal from mines'

New Delhi Sanjay Dutta & Vishwa Mohan TNN

The Times of India Jun 20 2014

Coal imports India's coal shortage is estimated to hit 350MT in 2016-17.

India imported over 80 million tonnes (MT) of coal in the last fiscal. Nearly 50 MT of the imports went to meet the shortfall in supplies from state-run monopoly Coal India, which produced some 475MT against a target of 562MT. Power production has been hanging precariously for years as growth in fuel supplies failed to keep pace with rising demand and rapid expansion of coal-fired generation capacity . The UPA-2 (2009-14) government's dogmatic approach towards granting green nod for opening new mines only exacerbated the problem by setting the clock back by several years

During its last days, however, it tried to hasten coal production by devising the “automatic route“ with a nod for select mines to raise production without holding public hearings, a process that is often misused by vested interests to delay projects.