India is the third largest coal producing country in the world after China and USA. With 96 billion tonnes of proved coal reserves India accounts for 9.4 % of World proved coal reserves. Coal is the most abundant and sustainable energy source in India. It contributes to around 55% in India’s overall energy share. India produced 662.522 billion units of power during 2006-07 of which coal based generation was 431.126 billion units, aptly defining the lead role of coal in power generation of the country.

Brief History of Coal Mining

With dawn of the Indian Independence, a greater need for coal production was felt for industrial development. Integrated approach in overall planning in coal mining is a post-independence phenomenon. National Coal Development Corporation (NCDC) was formed in 1957 with 11 collieries with the task of exploring new coalfields and expediting development of new coal mines.

Formation of CIL

The growing apathy of the private owners to invest in coal mining added with oil price shock, threatening energy security in the country, prompted Government to nationalise coal mines in the country in two phases in the seventies with a view to ensuring  safety, conservation and scientific development of huge reserve of coal that the country was endowed with. The Government took over all the coking coal mines on  October 16, 1971 and nationalised them on  May 1, 1972. Bharat Coking Coal Limited was thus born. Subsequently non-coking coal mines were nationalized in 1973, owned by Coal Mines Authority Limited (CMAL). In the year 1975, NCDC and CMAL were merged and Coal India Limited  came into being on  October 21, 1975 as a formal holding company with a Mission to produce coal, efficiently and economically.

Coal India Limited (CIL),  a Schedule ‘A’ company, under Ministry of Coal, is the single largest hard coal producing company in the world and the largest corporate employer in India employing a workforce of 4,37,828 (as on  June 01, 2007). Contributing to 84% of total hard coal production in the country, Coal India is bulwark of Indian Energy Sector.

Coal India and Subsidiary Companies

CIL encompasses the whole gamut of identification of coal reserves, detailed exploration followed by design and implementation and optimizing operations for coal extraction in its mines. The producing companies are Eastern Coalfields Limited (ECL), Sanctoria, West Bengal; Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand; Central Coalfields Limited (CCL), Ranchi, Jharkhand; South Eastern Coalfields Limited (SECL), Chattisgarh; Western Coalfields Limited (WCL), Nagpur, Maharashtra; Northern Coalfields Limited (NCL), Singrauli, Madhya Pradesh; and Mahanadi Coalfields Limited (MCL), Sambalpur, Orissa. It has a  consultancy company  namely,  Central Mine Planning and Design Institute Limited (CMPDIL), Ranchi, Jharkhand.

Coal India Operations

Coal India operates through 79 areas and 465 mines (as on 1-04-2007) of which 284 are underground mines, 144 opencast mines and 37 mixed mines. CIL further operates 17 coal washeries, (11 coking coal and 6 non-coking coal) and also manages 200 other establishments like Workshops, Hospitals etc.

Coal Consumers

Major consumers of coal in India are Power and Steel sectors. Others include Cement, Fertiliser, Brick Kilns, and small scale industries. Presently there are 71 Thermal Power Stations directly dependent on Coal India for their coal supplies. Coal India  caters to around 88% of coal requirement of power utilities in the country. It has recently introduced  sale of coal using Information and Communication Technology (ICT) through its E- Marketing scheme. During 2006-07 the sale through this means was a little over 30 Million Tonnes. A more consumer-friendly modified scheme has been introduced in January 2007.

Performance

Beginning with a meagre coal production of 79 million tonnes at the time of nationalization, Coal India has been consistently increasing its production over years and ended the fiscal 2006-07 with a production of 360.91 million tonnes.

As Coal India stepped into the fiscal 2007-08, the first year of XI Five Year Plan, with a production target of 384.51 million tonnes, Coal India’s performance during the X Five Year Plan (2002-03 to 2006-07) was commendable in terms of coal production, pre-tax profit earned and payment of tax and dividend  to the Government.

With aggregate production of 1625 million tonnes during the X Plan Period, CIL has exceeded the original planned target of 1577 million tonnes and even the mid term appraisal target of 1605.30 million tonnes by a margin of 47.96 million tonnes and 19.66 million tonnes respectively.  It paid aggregate taxes and dividends to Central Government to the tune of Rs. 16,384 crore which is 55.64% of the  pre-tax profit during the Plan.

During the X Plan Period Coal India had taken up 97 mining projects of which 81 had been sanctioned. These projects would provide CIL an incremental production of 112 million tonnes by 2011-12.

New Initiatives

Coal India plans to invest  Rs.18,000 crore for raising its annual production by 160 million tonnes to 521 million tonnes during the XI Plan period. Its entire investment shall be through internal accruals.

Underground Mining                                                                                                                         In keeping with the recent global trend Coal India has set its eyes on developing underground mines in a big way by adopting mass production technology using state-of–the–art technology. CIL is  planning high capacity underground mines in the range of 2-5 million tonnes per year in an effort to reverse the downward trend in underground production.

CIL has set a production target of 75 million tonnes annually  through its underground mines by the terminal year of XI Plan Period (2011-12) which amounts to an increase of 75% from the current level. Apart from expansion of ongoing mines, CIL has also planned to open 29 underground mines during the eleventh plan period with a capital outlay of Rs.3,656 crore. The working of underground mines being more environment -friendly than open cast ones, the pollution level in and around the mining area shall significantly reduce.

Coal Beneficiation     

For improved consumer satisfaction associated with concern for mitigating environmental  hazards arising out of coal, CIL has decided to set up coal washeries in all its prospective open cast mines of capacity 2.5 million tonnes and above under Build & Operate concept. This will be done associating private enterprises with core competence in coal washing practices. In the XI plan period the  washed coal production is targeted to be 163 million tonnes- an increase by more than 100 million tonnes over the present washing capacity. 

Coal Bed Methane (CBM) 

 Coal India is involved in two projects - (i) Collaborative development of CBM with ONGC in Jharia and Ranigunj coalfields.   (ii) CBM recovery and commercial utilization project. This is under implementation at Moonidih and Sudamdih mines of BCCL. Coal Bed Methane is an environment friendly clean fuel with properties similar to natural gas.

Underground Coal Gasification (UCG)

Coal India and ONGC are partners in a joint venture project for underground gasification of coal. The cost of the pilot project is around Rs 100 crore. A Memorandum of Understanding with equal participation of both partners was signed in November 2006.

CIL-DVC Join hands to Revive MAMC 

In a recent development, Coal India Limited (CIL) and Damodar Valley Corporation (DVC) have signed a Memorandum of Understanding (MoU) on 01 June, 2007 to examine the prospect for joint development of manufacturing facilities for underground mining machineries and material handling equipment and consequent revival of the PSU - Mining and Allied Machinery Corporation (MAMC), Durgapur.

Challenge Ahead

With the annualized growth rate pegged at 9.7% , Coal India is expected to produce 520.5 million tonnes  of coal out of the country’s overall production plan of 680 million tones by the terminal year of the plan period. According to XI Plan progamme, Coal India is to contribute a total of 2248.24 million tonnes during the entire XI Plan Period, which is almost 38% more than that of 1624.96 million tonnes, achieved during the X Plan. The company which has been making a significant contribution to meet energy needs of country would fully stretch itself in its endeavour to achieve the stiff and challenging targets of XI Plan.

*Inputs from Ministry of Coal