Coal: India
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The source of this article
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).
Commercializing coal blocks
[ From the archives of the Times of India]
Sanjay Dutta TNN
Pvt cos gained at cost of CIL
Private companies to whom the government allotted coal blocks without bidding may have made windfall gains at the cost of state-run major Coal India Ltd, a reading of the CAG draft report on the allocation of acreages suggests. The report observes that the proposal to take away blocks from CIL for allotment to commercial entities for captive mining was suggested by Tata Sons chairman Ratan Tata as the head of the government’s Investment Commission. Tata made the proposal in connection with initiatives in the power sector and it was agreed to by the Energy Co-ordination Committee (ECC) under the chairmanship of Prime Minister Manmohan Singh in February 2006. The report says that the ECC took the view that since Coal India till then had plans to mine only 150 acreages up to 2011-12, “some 79 blocks (out of 289 blocks reserved for it), which were explored in detail should be made available to NTPC and others for mining”. The ECC argued, the CAG draft report notes that such a move would be in the interest of increasing coal supplies. Thereafter, the coal secretary advised Coal India to retain only blocks which were projected to go into production up to 2011-12. Subsequently, the coal ministry “dereserved” 48 CIL blocks with over 9 bt (billion tonnes) of reserves in May 2006. Earlier, in January 2006, seven blocks of CIL had already been allotted — five to NTPC and two to the Sasan ultra-mega power project awarded to Reliance Power. These took away another 3.78 bt of reserves from Coal India, the report notes. However, the report notes, as of June 2011 no coal had been produced from an overwhelming majority of these blocks despite deadlines having passed. This was “contrary to the expectations of the Energy Coordination Committee” for earlier realization of production potential offered by these proven coal reserves. The CAG report notes that CIL was already working on an “emergency production plan” in the Tenth Plan (2002-07) “to meet the surge in demand of coal by advancing the production schedule in 12 existing mines/ ongoing projects and by taking up four new projects through outsourcing production of coal and removal of overburden (earth above layers of coal)”. Worried over its future production plans, CIL made repeated requests for additional blocks, which were “not acceded to/acted upon” by the coal ministry. It notes that CIL sought 138 blocks with reserves of over 57 bt in August 2008. In September 2011, the company tapered the demand to 116 blocks with reserves of 49 bt. Even after two years of CIL’s initial proposal, the ministry was yet to take a final decision, “This would adversely affect future production plan of CIL,” the CAG draft says. It also notes the government continued to give away explored mines despite objections from CIL and its subsidiaries. CIL PROPOSES, GOVT DISPOSES
November 2008 RAJHARA NORTH: Created 400 surplus employees for CIL
October 2009 MOIRA MODHUJORE NORTH: Block “inadvertently” included in dereservation list, Eastern Coalfield’s opposition rejected in Jan 2008
November 2011 BEHRABAND NORTH + VIJAY CENTRAL: De-reserved but not allotted. South Eastern Coalfields Ltd saw prospect of developing them as highly mechanised, high-capacity underground mines. Behraband North operated by SECL before de-reservation
Failure to block coal gate
[ From the archives of the Times of India]
Sanjay Dutta TNN
The government continued to give away coal blocks without bidding even after a meeting headed by Manmohan Singh (in his role as coal minister) on October 14, 2004 decided that all future allocation would be through the competitive route, says a draft CAG report. The government auditors’ report on performance of coal block allocations also says the Centre opted for the longer process of amending mining laws when it could have introduced competitive bidding through an administrative order under an existing law governing contracts. The report says that the October 2004 meeting with the PM as coal minister decided that applications for mines received after June 28, 2004 would be processed under the new competitive bidding regime. The government chose this as the cut-off date since the intention to introduce competitive bidding for coal blocks was first made public on this date at a ministry meeting with stakeholders, the auditor says. “However, the ministry of coal continued to follow the screening committee route for subsequent allotments till date with the approval of the Prime Minister’s Office,” says the CAG’s report. The draft report records how the government has failed to introduce the bidding process even after the necessary changes in the laws had been made. ‘Legal nod for bids came in 2006’ New Delhi: The law ministry had twice suggested ways to introduce auction for coal blocks while the coal ministry was tossing around the option of amending the Coal Mines (Nationalisation) Act of 1973 or the Mines and Minerals (Regulation and Development) Act of 1957, a CAG draft report says. As early as July 28, 2006, the CAG report notes, the department of legal affairs told the ministry the government could, if it wished, introduce competitive bidding by amending the “administrative instructions”. If the government chose to do so, the allotments could be done under the Indian Contract Act of 1872.
“In sum, there were a series of correspondences with the ministry of law and justice for drawing conclusion on the legal feasibility of the proposed amendments to the CMN Act/MMDR Act or through administrative order to introduce auctioning/competitive bidding process for allocation of coal blocks for captive mining. There was no legal impediment for introduction of transparent and objective process of competitive bidding for allocation of coal blocks for captive mining as per legal opinion of July 2006 of the ministry of law and justice and this could have been done through an administrative decision. However, the ministry of coal went ahead for allocation of coal blocks through the screening committee route and advertized in September 2006 for allocation of 38 coal blocks and continued with the process till 2009,” says the report. According to the lists of allotment in the CAG draft, 61 coal blocks were allotted to private companies in 2006. This is the highest number of allocations made between 2004 and 2009 in terms of how many blocks were given away in a year. However, in terms of reserves, 2009 stands out as the government gave away a reserve of 5,216 mt (million tonne) through 12 mines against 3,793 mt in 2006. Of this around 3,000 mt was given away to two private parties, a Tata group joint venture and a Jindal group unit, on a single day, February 27, 2009, barely a month before the Lok Sabha elections that year.
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.
Theft of coal, 2012-May 15, State-wise figure
India vis-à-vis the world
WHO'S GOT THE COAL?
The Times of India Sep 27 2014
India is the world's fourth largest producer of coal behind China, the US and Indonesia. China alone produces almost as much coal as the rest of the top 10 put together. Yet, both of these Asian giant nations are net importers of coal because they are among the largest consumers too, China the biggest and India the third biggest. Most other big producers are net exporters. At the other end of the spectrum, Japan and South Korea are among the biggest consumers of coal but are totally dependent on imports to meet their needs. The data here is in thermal units rather than tonnes since the same weight of coal can have varying energy value depending on its quality.
