Coal is the mainstay of India’s energy and 55%
of primary energy supply and 70% of power generation in the country are coal
based. India ranks third in coal production globally after China and USA.
The Ministry of Coal is responsible for
exploration, production and distribution of coal and lignite to meet the
requirements of different consumers and through the public sector undertakings it
is discharging its responsibilities. Coal India Ltd. and Neyveli Lignite
Corporation Ltd. (NLC) are the two Central PSUs under the administrative
control of the Ministry. Singareni Collieries Company Ltd. (SCCL) is the joint
undertaking of Government of Andhra Pradesh and Government of India with equity
sharing in the ratio of 51:49 respectively.
The need for systematic and scientific
development of coal industry was recognized from the inception of the process
of national economic planning in the country.
National Coal Development Corporation (NCDC) was set up in 1956 which
was the first step towards planned development of the industry. Singareni Collieries co. Ltd. (SCCL) was
already a government company in 1956 and Central Government started equity participation in SCCL from 1960
onwards. However, comprehensive development programme could be initiated only
after nationalisation of the industry in the early 1970s and formation of Coal
India Ltd. (CIL).
Soon after nationalisation of coal sector in the
early 1970s, Coal India Ltd. (CIL) was formed as a holding company in 1975 with
four coal producing companies and one planning and design institute and the
level of production was about 73 million tonnes at the time of its formation.
Today CIL has seven coal producing companies and one planning and design
institute with their operations spread over eight states and has achieved a
level of 436 million tonnes in 2011-12.
India’s assessed coal resources currently stand
at about 293 billion tonnes of which about 118 billion tonnes or 40% are proved
reserves and the remaining 60% are in inferred and indicated categories. Plans
have been drawn to enhance the efforts for coal exploration with a view to
enhance the reserve base.
Coal production enhancement is basically through
taking up of new projects under the public sector companies of the Ministry and
development of blocks allotted to various companies in public and private
sectors. In addition, acquisition of coal properties abroad has also been
adopted for securing coal supplies in meeting the demand.
A
number of policy initiatives taken by the Government over last three decades
has strengthened the coal sector in enhancing production with due regard to
safety and environment.
Introduction of setting of economic reforms in the early
1990s led to tapering off the budgetary support. After a major capital
restructuring of CIL in 1996, the budgetary support to CIL was completely
stopped. Coal prices were partially decontrolled in 1996 and administrative
pricing mechanism was discontinued on complete decontrol of coal prices with
effect from 1, January, 2000 and
coal companies were empowered to notify the prices. Subsequently the boards of
the performing coal companies were delegated higher financial powers for
decision making on their own. A new coal distribution policy was introduced in
2007 and fuel supply agreements have been made mandatory. Coal royalty has been
fixed on advalorem basis in place of mixed approach of fixed and advalorem
rates. The Government has also encouraged acquisition of coal equity abroad
from energy security point of view. Import duty on coal imports has been
tapered off and currently there is no import duty on imports. Similarly, import
duty on project imports has also been removed from the current fiscal. A proposal for setting up independent
regulatory authority for Coal is under consideration of Government. A Bill to
permit private sector in the commercial mining of coal has been awaiting
consideration of the Parliament.
Coal production has risen from about 78 million tonnes in
1975 to 540 million tonnes in 2011-12, the Terminal year of the XI Plan. About 100 million tonnes of coal was imported
in 2011-12 which forms about 15% of the coal consumption of about 650 million
tonnes during 2011-12.
The coal production target in the Terminal Year
2016-17 of the XII Plan is set at 795 MT implying a growth of 8% against the
actual growth of about 4.6% in the XI Plan. However, when compared with the
projected demand of 980.50 MT in 2016-17, a gap of 185.5 MT exists between
domestic production and the projected demand. This would need to be met through
coal imports.
There have been constraints in enhancing coal
production in terms of environmental issues, land acquisition, R&R, coal
evacuation and law & order in some places. However, Ministry of Coal has
been taking up the issues with the concerned State and Central authorities on
regular basis for amicable solutions. Over the period of time the
rehabilitation package of CIL has evolved and made more liberal than the
National R&R Policy. Coal companies can adopt either CIL’s policy or the
concerned State Govt. Policy whichever is liberal.
Coal evacuation is one of the critical area in the entire
coal supply chain in the country and railways are the major bulk transporter.
While efforts to strengthen the existing infrastructure are being made on
continuous basis, the most important rail connectivity projects in the
potential coalfield areas have been taken up by the Ministry with the Ministry
of Railways and the State Governments concerned. These projects will be funded through the
internal resources of CIL. Action plan has been drawn in regard to
implementation of these projects and railways, Ministry of Coal and coal
companies are regularly monitoring the status of implementation.
The pending issues regarding environment and forestry
clearances are being regularly addressed in consultation with Ministry of
Environment and Forests and the State Governments concerned. All the mitigation
measures as approved by Ministry of Environment and Forests while according
environmental clearance are being strictly followed by the coal companies while
implementing the projects and rigorous monitoring by both coal companies and
the State Pollution Control Boards is
being done.
Mine reclamation and rehabilitation through properly
drawn mine closure plans are being addressed both during the mining and at the
stage of final closure. The Ministry has
issued comprehensive guidelines in regard to preparation of mine closure plans
which are now integral part of mining plans. Mine owners are bound through
financial commitment by charging specified rate per hectare of land involved
and through opening an escrow account with coal controller.
The
Government has approved a Master Plan to address the issues of fires, land
subsidence and rehabilitation of affected persons in the old mined out areas of
Jharia and Raniganj coalfields for implementation in ten year’s time. Jharia
Rehabilitation and development Authority in the State of Jharkhand and Asansol
Durgapur Development Authority in the state of West Bengal have been entrusted
with the job of implementation of Rehabilitation works particularly for private
people and BCCL and ECL will be responsible for rehabilitating their colonies
and employees. The Government will provide financial resources for implementing
the project.
After amendment of the Coal Mines (Nationalisation) Act
in 1993, the allocation of coal blocks for captive purposes was started. The coal blocks for private sector were
allocated through a mechanism of Inter-Ministerial and Inter-Governmental
Screening Committee. The coal blocks
were also allocated to Government Companies.
So far 218 coal blocks were allocated out of which 177 coal blocks stand
allocated as on date. The MM(DR) Act,
1957 was amended in 2010 providing for competitive bidding as selection process
for allocation of blocks to Private Sector.
The details Rules for the above purpose have also been notified. Consequently, the Government has offered 17
coal blocks for allocation to Government Companies. The modalities for allocation of blocks to
Private Companies through bidding are under finalisation.
Emphasis is laid on technology development and
modernisation in the mines of CIL for improved production, productivity and
safety.
As far as lignite is concerned, the currently assessed
reserves stand at about 42 billion tonnes of which about 6 billion tonnes or
about 15% are in the proved category. More than 80% of the lignite resources
occur in the State of Tamil Nadu and about 12% in Rajasthan and 6% in Gujarat.
The balance are spread over Puducherry, J&K and Kerala.
The lignite production in the country has
increased from about 8 million tonnes in 1984-85, the Terminal Year of the VI
Plan to 43.10 million tonnes in 2011-12, the Terminal Year of the XI Plan.
Lignite production is projected to reach about 68 million tonnes in 2016-17,
the Terminal Year of the XII Plan. The important producers of lignite in the
country are Neyveli Lignite Corporation, Gujarat Mineral Development
Corporation and Rajasthan State Mines & Minerals Development Corporation.
Neyveli’s lignite production in 2011-12 was 24.59 million tonnes and the same
is projected to be 30.51 million tonnes in 2016-17, the Terminal Year of the
XII Plan. The production from NLC is directly linked to downstream power units
and one of the IPPs. The currently installed power generation capacity of
Neyveli is 2490 MW and has generated 18,789 Million Units (gross generation).
The Government has introduced Gross Calorific Value (GCV)
based grading and pricing of thermal coals on par with best international
practices of coal trading in the world with effect from 1.1.2012. Emphasis is
laid on coal quality improvement through proper crushing, sizing and
preparation and strengthening sampling arrangements. Coal beneficiation is
being addressed on priority. Both environmental and economic considerations are
the drivers for promoting coal beneficiation in the country.
At
the same time development of clean coal technologies covering coal bed methane,
underground gasification, coal to liquids or coal liquefaction have been under
focus for quite some time. Government
has already offered 33 coal blocks for exploration and exploitation of CBM in
four rounds of bidding and four blocks have entered in to commercial production
with some 2.5 lakh cubic meters per day of gas production. CIL has conceived
five Coal Mine Methane projects and after consultation, Ministry of Petroleum &
Natural Gas have agreed to facilitate CIL through nomination for commercial
exploitation of CBM and a policy framework in this regard is under process.
Government has allocated two coal blocks for CTL purposes to two private
companies. The Ministry has also identified 5 lignite blocks and two coal
blocks for development of UCG and the same will be offered in due course of
time.
Since coal has to continue to play a critical role in
supporting India’s energy plans for considerable time into the future, we need
to make coal mining and coal usage more environment friendly. We also need to
strengthen our infrastructure for coal movement from production centres to
consuming centres and strengthen the port infrastructure for handling rising
imports. The policy of inclusive growth for carrying the affected communities
in development of coal is most important in years to come.
(PIB Feature).
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*Inputs
from the Ministry of Coal.
SS-23/SF-23/24-01-2013
RTS/HSN