coal report em new.pdf

8/9/2019 coal report em new.pdf

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A STUDY OF INDIAN

COAL SECTOR

PRESENTED TO

DR. Y C JOSHI

GHPIBM

PREPARED BY:

DHAVAL BARIA (14048)

AAKASH PRAJAPATI

(14041)

DIPALI MAKWANA

(14049)


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Table of ContentsIntroduction ............................................................................................ 3

Objectives ............................................................................................... 4

Coal: choice for Indian energy ................................................................ 4

Factors which led up to nationalization of coal industry in India ............ 9

Import of coal ....................................................................................... 12

Important observation about coal import............................................... 14

Export of Coal ....................................................................................... 16

Legislation ............................................................................................ 16

Core Sector ........................................................................................... 18

Non Core Sector Industries ................................................................... 19

International Co-Operation ................................................................... 23

The Indian coal sector: Challenges and future outlook.......................... 24

Bibliography ......................................................................................... 26


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Objectives:

1. To understand current scenario of coal in India

2. Coal consumption in various firm for specific uses

3.

Coal is limited resource what next after coal

Coal: choice for Indian energy

COAL is the most important and abundant fossil fuel in India. It accounts for 55%

of the country's energy need. The country's industrial heritage was built upon

indigenous coal.

Commercial primary energy consumption in India has grown by about 700% in the

last four decades. The current per capita commercial primary energy consumption

in India is about 350 kgoe /year which are 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 to rise. 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 Indiasenergy scenario.

Indian coal offers a unique ecofriendly fuel source to domestic energy market for

the next century and beyond. Hard coal deposit spread over 27 major coalfields,

are mainly confined to eastern and south central parts of the the country. The

lignite reserves stand at a level around 36 billion tones, of which 90 % occur in the

southern State of Tamil Nadu


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Demand and supply scenario:

Sector wise coal production in India:


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Industry structure

Currently, the government enjoys a monopoly in producing coal with over 90% of

the production coming from government-controlled mines. The policy for captive

mining was introduced in 1993. This opened the coal sector to private investment,although no promising progress has been made in the captive coal blocks allotted

by the government. Out of the 200 allocated blocks (22 have been de-allocated),

only 30 mines have commenced production due to various reasons. The combined

production from these was merely 36.30 MT in FY 2010-11 against a target of 104

MT. Contentious issues, availability of geological data, land acquisition and R&R,

environment clearances, mining lease, etc. are the primary reasons behind the

dismal production. Currently, coal block auction is proposed and detailed

mechanism is being formulated for transparency and efficient processing.

Current scenario

India is the worlds fifth largest energy consumer, accounting for 4.1% of the

global energy consumption. Maharashtra is the leading state in electricity

generation. The current per capita consumption of energy in India is 0.5 toe against

the global average of 1.9 toe, indicating a high potential for growth in this sector.

Of the total electricity consumed in the country, approximately 80% is produced

from coal.

Steel sector

Coal is an essential input in the production of steel. In 2011, the world crude steel

production reached 1,518 MT, reflecting a growth of 6.2% over 2010. The per

capita finished steel consumption in 2011 is estimated at 215 kg for world and 460

kg for China, while that for India it is estimated currently at 55 kg (provisional).

This clearly indicates scope for increasing the per capita steel consumption, a

factor which correlates to the coking coal availability and production within the

country. India has very limited reserves of coking coal which is a key raw materialfor the production of steel. Coking coal accounts for only 15% of the countrys

overall proven coal reserves. The Jharia coalfield, located in the state of Jharkhand,

holds the majority of the coking coal reserves The Indian steel industry has been

facing acute shortage of coal for the last several years. As per the report of the

Working Group of Coal and Lignite for the 12th Five Year Plan, the steel


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production by 2016-17 is projected to be 105 MT. The corresponding requirement

of coking coal for this quantity of steel is worked out at 67.2 MT in 2016-17.

Distribution of coking coal to steal plant:

Every year requirement of indigenous coking coal is being determined on the basis

of the target of hot metal production fixed by the ministry of Steel collectively as

well as individually for every Steel Plant in the Country. Requirement of coal coal

is being derived proportionately and with the help of prescribed norms in relation

with the hot metal production. Accordingly, Ministry of Steel advise Coal India

about their total requirement of indigenous coking coal for the year. CIL then

indicates to Steel Authority the total quantity of coking coal that could be supplied

during the year.

Allocation of coking coal was earlier made by the Coal controller on month to

month basis according to CIL offers for the same period. However vide

amendment carried out by the Central Government to the Colliery Control Order

1945, the Government had exempted the prices and distribution of coking coal

from the provisions of Colliery Control Order. Consequently the supply of coking

coal are being made by the coal companies them selves on the basis of linkages

established by a competent linkage committee or on the basis of then existing

commitments.

Cement sector

India is the second largest producer of cement in the world. Large amount of

energy is required during the production of cement and coal is used as an energy

source. During the process, coal is usually burnt in the form of powder. Around

450g of coal is consumed to produce 900g of cement. The cement industry is the

third largest consumer of coal in the country. Due to the high cost and inadequate

availability of oil and gas, coal is used as the main fuel in the industry. However, in

the last few years due to rapid adoption of the dry process, the specificconsumption of coal for producing cement has reduced significantly. It has also

improved efficiency in cement kilns and increased the use of fly ash (produced in

power plants) and granulated slag (produced in blast furnaces of steel plants) in the

production of cement (Coal Vision, 2025).


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Coal demand trend of cement industry in India via-a-via cement production

Electricity sector:

India is the worlds fifth largest energy consumer accounting for 4.1% of the

global energy consumption

The current per capita energy consumption in India is 0.5 toe against the against

the global average of 1.9 toe indicating high potential for growth in this sector.

Total electricity consumed in india approximately 80% is produced from coal.

Nationalization of Coal Mines

Right from its genesis, the commercial coal mining in modern times in India has

been dictated by the needs of the domestic consumption. On account of the

growing needs of the steel industry, a thrust had to be given on systematicexploitation of coking coal reserves in Jharia Coalfield. Adequate capital

investment to meet the burgeoning energy needs of the country was not

forthcoming 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


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these reasons, the Central Government took a decision to nationalize the private

coal mines.

The nationalization was done in two phases, the first with the coking coal mines in

1971-72 and then 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 management of coking coal mines and coke oven plants

pending nationalization.

This was followed by the Coking Coal Mines (Nationalization) Act, 1972 under

which the coking coal mines and the coke oven plants other than those with the

Tata Iron & Steel Company Limited and Indian Iron & Steel Company Limited,

were nationalized on 1.5.1972 and brought under the Bharat Coking Coal Limited

(BCCL), a new Central Government Undertaking. Another enactment, namely the

Coal Mines (Taking Over of Management) Act, 1973, extended the right of theGovernment of India to take over the management of the coking and non-coking

coal mines in seven States including the coking coal mines taken over in 1971.

This was followed by the nationalization of all these mines on 1.5.1973 with the

enactment of the Coal Mines (Nationalization) Act, 1973 which now is the piece of

Central legislation determining the eligibility of coal mining in India

Factors which led up to nationalization of coal

industry in India

Nationalization of coal industry in India in the early seventies was a fall out of

two related events. In the first instance it was the oil price shock, which led the

country to take up a close scrutiny of its energy options. A Fuel Policy Committee

set up for this purpose identified coal as the primary source of commercial energy.

Secondly, the much needed investment needed for growth of this sector was not

forthcoming with coal mining largely in the hands of private sector. The objectives

of Nationalization as conceived by late Mohan Kumar amangalam were;Conservation of the scarce coal resource, particularly coking coal, of the country

by

Halting wasteful, selective and slaughter mining.

Planned development of available coal resources.


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Improvement in safety standards.

Ensuring adequate investment for optimal utilization consistent with growth needs.

Improving the quality of life of the work force.

Moreover the coal mining which hitherto was with private miners suffered with

their lack of interest in scientific methods, unhealthy mining practices etc. The

living conditions of miners under private owners were sub-standard.

Coal Resources

Inventory of Geological Resources of Coal in India: As a result of

exploration carried out up to the maximum depth of 1200m a cumulative total of301.56 Billion tons of Geological Resources of Coal have so far been estimated in

the country as on 1.4.2014.

The details of state-wise geological resources of coal are given as under:

State

Proved (Mt) Indicated (Mt) Inferred (Mt) Total

(Mt)

West Bengal 13403 13022 4893 31318

Jharkhand 41377 32780 6559 80716

Bihar 0 0 160 160

Madhya Pradesh 10411 12382 2879 25673

Chhattisgarh 16052 33253 3228 52533

Uttar Pradesh 884 178 0 1062

Maharashtra 5667 3186 2110 10964

Orissa 27791 37873 9408 75073Andhra Pradesh 9729 9670 3068 22468

Assam 465 47 3 515

Sikkim 0 58 43 101

Arunachal Pradesh 31 40 19 90

Meghalaya 89 17 471 576


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Nagaland 9 0 307 315

Total 125909 142506 33149 301564

Status of Coal Resources in India during Last 5 years

The increase/up gradation of coal resources in the country during last 5 years is

furnished in table below:

As on Geological Resources of Coal (In Million tones)

Proved Indicated Inferred Total

1.1.2009 105820 123470 37920 267210

1.1.2010 109798 130654 36358 276810

1.1.2011 114002 137471 34390 285862

1.1.2012 118145 142169 33183 293497

1.1.2013 123182 142632 33101 298914

1.1.2014 125909 142506 33149 301564

Coal production, distribution, and Coal production:

Through sustained programme of investment and greater thrust on application of

modern technologies, it has been possible to raise the production of coal from alevel of about 70 million tons at the time of nationalization of coal mines in early

1970's to 565.64(P) million tons (All India) in 2013-14.

Coal India limited and its subsidiaries accounted for 462.42 million tons during

2013-14 as against a production of 452.21 million tons in 2012-13 showing a

growth of 2.3%.

Singareni Collieries Company Limited (SCCL) is the main source for supply of

coal to the southern region. The company produced 50.47 million tons of coal

during 2013-14 as against 53.19 million tons during the corresponding period last

year. Small quantities of coal are also produced by TISCO, IISCO, DVC and

others.


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Coal distribution and marketing:

The Marketing Division of CIL coordinates marketing activities for all

its subsidiaries. CIL has set up Regional Sales Offices and Sub-Sales Officeselected places in the country to cater to the needs of the consuming sectors in

various regions.

Coal Companies/Coal India Limited is allocating coking coal to steel plants for

their requirements. For core sector, sale of coal is guided by linkages and

allocations by the competent authorities.

For non-core Sector consumers, with a view to reaching the benefit of decontrol of

coal as per Colliery Control Order, 2000, Coal India Limited has decided to

authorize its subsidiary companies to formulate their own system and procedure for

sale of coal to this sector. The new policy of Coal India Limited is aimed at

providing a simplified, transparent and customer-friendly system and procedure. In

the new policy framework the system of linkage and sponsorship for the purpose of

coal supply to non-core sector is being done away with. In the emerging new

policy framework for coal sale to non-core sector, stress is being given on bilateral

agreement between supplying subsidiary company and consumer for well defined

commitment on the part of both buyer and seller.

Import of coal

As per the present Import policy, coal can be freely imported (under Open General

Licence) by the consumers themselves considering their needs based on their

commercial prudence.

Coking Coal is being imported by Steel Authority of India Limited (SAIL) and

other Steel manufacturing units mainly to bridge the gap between the requirement

and indigenous availability and to improve the quality. Coal based power plants,

cement plants, captive power plants, sponge iron plants, industrial consumers and

coal traders are importing non-coking coal. Coke is imported mainly by Pig-Iron

manufacturers and Iron & Steel sector consumers using mini-blast furnace.


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Details of import of coal and products i.e. coke during the last five years is as

under: (in million tons)

Coal

2009-10 2010-11 2011-

12

2012-

13

2013-14 2014-15

Coking Coal 24.69 19.48 31.80 32.56 37.19 10.87

on-coking

Coal

48.56 49.43 71.05 105.00 131.25 38.59

Coke 2.35 1.49 2.36 3.07 4.19 1.17

Total Import 75.60 70.40 105.21 140.63 168.44 49.45*

* Import upto June 2014

The current duty on imported coal as amended on 28.2.2004 is as under:-

Import Duty Type of coal

Coking having up to 12% ash 0%

Coal having ash 12% and more 5%

Coke 5%

Non-Coking Coal 5%

Note: With effect from 9.1.2004 the Central Government has withdrawn the

Special Additional Duty.

Trend in coal import


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Important observation about coal importChina and India becoming the highest gross net importer of coal

India was traditionally coking coal importer due to unavailability of good quality

coking coal for steel, but situation has changed in favor of non-coking steel for lastfive years with non-coking coal import rising from countries like Indonesia and

south Africa.

Further, coal washing capacity in country has not increased sufficiently, due to

various reasons, to generate required quantity of washed coal for consumption,

particularly for steel plant. This necessities the import of high quality coal to meet

the requirement of steel plants.

Risks involved in coal imports

There are certain factors which can significantly affect the project economics.

Some of the key risks involved are discussed below:

In case of acquisition, profile of the asset and timing of acquisition is important.

Acquisition of wrong asset (where profile mismatch may be in terms of size,

quality, developmental time required etc.) may result in heavy costs as huge sum of

money is to be paid upfront.

Due Diligence of asset: While due diligence of source is necessary for reliability

of coal supply, it becomes more important in case of asset acquisition. If detailed

technical, financial, tax and other due diligence are not carried out, correct price

may not be assessed resulting in heavy losses.

Commercial Contract: For reliability of long term supply, it is necessary that

detailed contract is drafted to ensure that roles and responsibilities of the parties are

clearly identified. This should also detail obligations and provisions for non

performance. Contract should have enough enforcing provisions and deterrent for

ensuring performance by each party.

Coal Prices: FOB price of coal forms more about 60-80% of landed cost of coal.

Coal Prices in Global coal market has seen significant variation. Over past five

years, a coal price has seen about 300% increase and standard deviation of coal


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Export of CoalCoal is under Open General Licence (OGL) list. India exports coal to the

neighbouring countries to meet their demand of coal. The traditional buyers of

Indian coal are Nepal, Bangladesh and Bhutan. Export to Nepal and Bhutan is

done in rupee exchange as per the protocol between the two countries and with

Bangladesh it is done in US Dollar. Export of coal to the neighbouring countries

was earlier canalized through the Mineral and Metal trading Corporation, but for

the last few years it has been decanalised. Export of coal by CIL is made through

tender route The quantum of coal exported by CIL during 2002-03 to the

neighbouring countries was 12,650 tons. During 2003-2004 the quantity of coal

exported by CIL was 35,831 tons (Provisional).

Policy frame work

Eligibility to do Coal Mining

Under the provisions in Section 3 (3) of Coal Mines (Nationalization) Act, 1973,

Coal mining was mostly reserved for the public sector. Amendments to Coal Mines

(Nationalization) Act, 1973 have been done to facilitate captive mining in

approved end-use industries. The parties eligible to do coal mining in India without

the restriction of captive consumption are:

i. The Central Government, a Government company (including a StateGovernment company), a Corporation owned, managed and controlled by the

Central Government.

ii. A person to whom a sub-lease has been granted by and economic

development in a coordinated manner and that the coal produced by the sub-lessee

will not be required to be transported by rail.

Legislation:

COAL INDIA (REGULATION OF TRANSFERS AND VALIDATION) Act,

2000

The private coal mines of the country were nationalized in two phases during

1971-1973. In the first phase coking coal mines were nationalized. In the second

phase non-coking coal mines were nationalized. Even since the nationalization of


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Corporation (MECL) have also been engaged for carrying out Promotional

Regional Exploration.

In the second stage, Detailed Exploration is carried out. Central Mine Planning and

Design Institute Ltd. (CMPDI) directly as well as through Mineral ExplorationCorporation, State Govts. and private agencies carry out detailed exploration, for

the purpose of mine planning and exploitation of coal reserves for meeting the

demand of different sectors of the economy. The detailed exploration in the

command area of SCCL is carried out departmentally. Priorities of various

projects/blocks, taken up for Detailed Exploration, are decided taking into account

factors like emerging demand and its location, availability of infrastructure for coal

evacuation and techno-economics of the mine development including coal quality.

Coal linkages

PRESENT POLICY REGARDING COAL LINKAGE

The Linkages of coal demand is primarily done with the objective of planning of

coal supplies, keeping in view indigenous coal resources as well as the need to

supply fuel of appropriate quality to the consumers and at the same time making

the most economic use of the available capacity for production and of coal.

The system of Linkages as in vogue, both for core and non-core sector consumers

(as it has been evolved over the years) has proved to be immensely useful in

fulfilling its objectives. The usefulness and effectiveness of the linkage system is

best diverse coal consuming sector, spread over the country, from coalfields having

differential growth in production. The Linkage Policy as applicable for different

consuming sector is detailed in all its related aspects as follows:

Core Sector

STANDING LINKAGE COMMITTEE (LONG TERM) FOR POWER &CEMENT SECTORS

The consumers desiring linkage for supply of coal should apply for linkage to the

SLC (long Term). The consumers should route the application through the

concerned Ministry to the Chairman, SLC (LT). For example, for setting up a

Power Plant, the application has to be routed through the Central Electricity


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Authority and Ministry of Power. In case of cement unit, it has to be routed

through the Ministry of Industry , Ministry of Industrial Policy & Promotion. . The

SLC (LT) has the Additional Secretary in the Ministry of Coal as the Chairman.

Other members of the SLC (LT).are representatives of CIL, representatives of

SCCL, CMPDIL, Railways, Planning Commission, Central Electricity Authority,Ministry of power and representative of Ministry of Industry, Dept. of Industrial

Policy & Promotion (as the case may be). The Committee decides the linkage of

coal for source of supply, quantum of coal and the made of transportation.

Standing Linkage Committee (Short Term) For Power and Cement Sectors

The Additional Secretary in the Ministry of Coal, Govt. of India is the Chairman of

the Committee. Representatives of Coal India Limited, Central Electricity

Authority, Ministry of Power, Railways, Representatives of Singareni CollieriesCo. Ltd. are the member of SLC (ST) for power sector. In SLC (ST) for cement

sector besides Chief of Marketing of CIL, representatives of SCCL, Railways,

Ministry of Industry, Dept.of Industrial Development are the other members.

The committee meets in March, June, September and December each year to

review the coal supplies to Power and Cement Sectors in the quarter and finalise

the linkage to consumers in Power and Cement Sectors for the next quarter. Time

to time adjustment/incorporation in the quarterly linkages is done by the

Chairman, SLC(ST). Minutes of the meetings are drawn and circulated to all

concerned for implementation.

Non Core Sector IndustriesAt the time of nationalisation there was not system of obtaining confirmation of

CIL by any consumer with regard to coal availability and of coal specifications on

which the burning equipments were to the designed by the new industries. The

consumers were drawing coal supply from the sources convenient to them.

In 1978, it was agreed that CIL should decide the linkage to consumers who are

falling under non-core sector category keeping in view the rationalisaion of wagon

movement, proximately to the coal field, the design of the burning equipment and

availability of coal in various coal fields. To this effect, a circular was sent to all


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the State Governments informing them accordingly. Since them, `linkage Cell' has

been functioning at CIL. Later on, it was decided that such linkages should be

discussed and decided by a Committee called "Non-core sector Linkage

committee" (NCLC). This system was adopted in October, 1982 which still

continues.

Noncore sector consumers approach CIL in advance for granting linkage of coal to

their units, before installation of their burning equipments. The consumers have to

design the same keeping in view qualitative availability of coal. However, this

system had not been rigidly adhered to as a number of consumers approached CIL

for granting linkages only after installation of their burning equipments.

Consumers having a projected requirement upto 5000 MT of coal per month and

desiring drawal of coal from CIL are required to submit linkage application, in theprescribed Performa. Based on the scrutiny of technical data, linkage is issued.

Linkage issued remains valid for a period of two years by which time the

consumers are expected to start drawing supplies.

Normally movement of coal by rail is encouraged, although where ever necessary,

movement by road is resorted to. Consumers whose requirements are more than

500 Tons per month and are located beyond 250 Km from the linked source are

accorded linkage for supply by rail.

However, depending on operational/loading convenience relaxations are also

considered. Consumers located in the vicinity of coalfield are given coal by road

irrespective of quantity.

Linkages are granted for a range of grades suiting consumer's requirements, so that

desired flexibility in planning and execution of coal supplies can be maintained. It

is important to note that many of the supplying coal pilots/collieries load coal of

more than one grade in a rake.

In case any consumer does not draw supplies continuously for 24 consecutive

months, the linkage is treated as `snapped' Restoration of snapped linkages is done

by the concerned contact sales office.

Linkages are not granted to the seasonal industries like manual brick

manufacturing units.


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Consumer requiring coal, more than 5000 tons per month are required to obtain a

clearance from the ministry of coal before obtaining formal linkage by CIL which

is granted as per the above procedure as specified for consumers requiring less than

5,000 tons per month.

Requirements of consumers of Southern States like Tamilnadu, Karnataka, Kerala,

Andhra Pradesh, Pondicherry and Goa are normally met by the SCCL. In the event

any consumer located in these stated desire to obtain linkage from CIL source, the

same is allowed.

The above procedure is not applicable in case of manufacture of special smokeless

fuel (SSF) and cokery units (manufacturers of BH hard coke) for which separate

norms/ system exists, as follows:

Special Smokeless Fuel

Prospective entrepreneurs desiring to set up SSF plant based on patented

technology of CMPDIL, Ranchi are required to obtain recommendation from the

High level Committee (HLC) of the concerned State and if the HLC is not

functioning, from the concerned DI/DIC and formally apply to CIL-Marketing

Division in specified format for issuance of Coal Clearance. CIL-marketing, after

scrutiny of the application, and on confirmation from the supplying coal company

about availability of coal for proposed plant, issues coal clearance certificates infavour of the unit. Coal linkages are granted by the subsidiary coal companies after

meeting the requirements of operation of project report and for acquiring of design

packages etc., from CMPDIL-Ranchi on deposition of necessary fee to that office.

Pricing of Coal

Like in every other commodity, the price of domestic coal is determined by the

level of supply and demand. However, the response of overall demand and supplyto price variations is slow due to the structure of the coal industry as well as the

nature of the user industries. The two government-owned companies of India,

namely Coal India Ltd and Singareni Collieries Company Ltd, working in different

geographies, see their role as one of fulfilling the production targets fixed by the


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government and take up plans and projects to meet the targets, with very little

surplus to serve any unanticipated or sudden increase in demand.

1. Prior to 1.1.2000 the Central Government was empowered under section 4 of

the Colliery Control Order, 1945, as continued in force by the EssentialCommodities Act, 1955, to fix the grade-wise and colliery-wise prices of

coal. The prices of the administered grades of coal were last revised w.e.f.

17.6.94. The price notification had been amended in December 1995,

January 1996 and April 1996 to enhance the differential between run of

mine, steam and slack coal, to meet the increase in transportation charges

and also to provide for additional prices for coal produced from

Ramagundam OCP of SCCL and Rajmahal OCP of Eastern Coalfields

Limited, respectively.

2.

Following the recommendations of Bureau of Industrial Costs and Prices

(BICP), a decision was taken by the Government to deregulate the prices of

all grades of coking coal and A, B, & C grades of non-coking coal and this

decision was implemented with effect from 22.3.96. Subsequently in

consideration of a recommendation of the Committee on Integrated Coal

Policy, the Government decided to de-regulate the prices of soft coke, hard

coke and D grade of non-coking coal and this decision was implemented

with effect from 12.3.97.

3.

The Government also decided to allow CIL and SCCL to fix prices of E, Fand G grades of non-coking coal once in every six months by updating the

cost indices as per the escalation formula contained in the 1987 report of the

BICP and necessary instructions to this effect were issued to CIL and SCCL

on 13.3.97.

4. The pricing of coal was fully deregulated after the Colliery Control Order,

2000 was notified with effect pricing of coal from 1st January 2000 in

suppression of the Colliery Control Order, 1945. Under the Colliery Control

Order, 2000 the Central Government has no power to fix the prices of coal.5. However, the Ministry of Power has been writing to the Department of Coal

that in the absence of a regulatory mechanism, the prevailing monopoly

situation in the coal market will lead to arbitrary increase in price levels

affecting adversely the cost of generation and thereby electricity tariff which

has direct impact on the national economy. The Ministry of Power has been


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pressing for appointing an independent regulatory body for price

determination. Several State Governments and State Electricity Boards/

Undertakings have also raised the issue.

6. In view of the above, the Tariff Commission is being involved in pricing of

coal for the Power Sector and to suggest modalities for pricing of coal forother sectors.

7.

International Co-Operation

Foreign Collaboration

To meet country's growing demand for coal, foreign collaboration with theadvanced coal producing countries are considered for:

Bringing in new technologies both in underground and opencast sectors for

efficient management in the coal industry and skill development and training

etc.

Seeking bilateral funds for import of equipment , which are not

manufactured in the country

Bringing foreign financial assistance to meet the investment requirement

Keeping these objectives in view, Joint Working Group on coal had beenset up with France, Germany, Russia, Canada, Australia and China. Department of

Coal is also the nodal Department for the Joint Commission with Poland. The

priority areas, inter-alia, include acquisition of modern underground mining

technology, introduction of high productive opencast mining technology,

working underground in difficult geological conditions, fire control and mine

safety. Training of Indian personnel as well as assimilation of the technology are

an important consideration. With the liberalization of the economy, greater thrust is

being given to get the foreign investments /assistance on the basis of cost

competitiveness.

The latest policy pursued by CIL is to encourage technology up gradation

through Global Tender. Bilateral co-operation, although limited, continues to play

an important role for search of new technologies and process improvement.


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Cooperation with china (30th

June, 2003)

Cooperation with France 2002

Cooperation with UK 1997

Cooperation with Poland 1996

Cooperation with Kazakhstan 2010

Cooperation with South Africa

Cooperation with japan

Cooperation with USA

Cooperation with Australia

The Indian coal sector: Challenges and future outlookSteel sector Coal is an essential input in the production of steel. In 2011, the world

crude steel production reached 1,518 MT, reflecting a growth of 6.2% over 2010.

The per capita finished steel consumption in 2011 is estimated at 215 kg for world

and 460 kg for China, while that for India it is estimated currently at 55 kg

(provisional). This clearly indicates scope for increasing the per capita steel

consumption, a factor which correlates to the coking coal availability and

production within the country. India has very limited reserves of coking coal which

is a key raw material for the production of steel. Coking coal accounts for only

15% of the countrys overall proven coal reserves. The Jharia coalfield, located in

the state of Jharkhand, holds the majority of the coking coal reserves The Indian

steel industry has been facing acute shortage of coal for the last several years. As

per the report of the Working Group of Coal and Lignite for the 12th Five YearPlan, the steel production by 2016-17 is projected to be 105 MT. The

corresponding requirement of coking coal for this quantity of steel is worked out at

67.2 MT in 2016-17.


25/26


26/26

Bibliography

www.pwc.com/india

IEA Publication

www.idsa.in/idsacomments/WhyCoalMattersinIndia_phosur_010610.html

http://www.coal.nic.in/welcome.html

http://www.indiacore.com/coal.html

http://www.india-briefing.com/news/indias-coal-industry-moves-privatization-

protests-trade-unions-9149.html/

coal report em new.pdf

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