August 30, 2008
Milestones in Indian coal sector during 2007 - Detailed
India’s ministry of coal has released the details of achievements in coal and allied products during 2007 as under.
1. Coal production
2. Lignite Production
3. Coal Linkage
4. New Coal Distribution Policy
5. Allocation of coal blocks
6. Approval of coal projects
7. Opening of coal sector
8. Rates of Royalty
9. Miniratna status
10. Non official directors
11. Coal regulator
12. Coal sector reforms
1. Coal production
Coal India Limited
During the year up to November 2007, CIL’s coal production was 221.48 million tonnes as up by 2.3% YoY as compared to 216.49 million tonnes during the corresponding period of the previous year. Overall off take in the aforesaid period was 237.74 million tonnes up by 5.9% YoY as compared to 224.37 million tonnes during the corresponding period of the previous year. Coal dispatches including middling to power sector during the same period was 179.55 million tonnes up by 7.07% YoY as compared to 167.69 million tonnes during the corresponding period of last year. Coal stocks with the power stations were 14.05 million tonnes as on November 30th 2007.
SCCL
During the year up to November 2007, coal production was 26.19 million tonnes up by 16.9% YoY as compare to 22.39 million tonnes during the corresponding period of previous year. Overall off take in the same period was 27.21 million tonnes as up by 19.13% YoY compared to 22.84 million tonnes during the corresponding period of the previous year. Coal dispatches including middling to power sector during the same period was 19.51 million tonnes up by 22.8% YoY as compared to 15.88 million tonnes during the corresponding period last year.
2. Lignite Production
NLC
During the year up to November 2007, NLC’s lignite production was 136.86 million tonnes up by 10.14% YoY as compared to 124.26 million tonnes during the corresponding period of the previous year and gross power generation in the aforesaid period was 11522.85 million units up by 18.24% YoY as compared to 9745.55 million units.
3. Coal Linkage
During 2007, 27 projects of thermal power plants and independent power producers involving coal commitment to the tune of about 75 million tones have been recommended for issue of letter of assurance. In addition, requests of a large number of applicants of sponge iron units, cement plants, captive power plants etc have also been considered recently by the standing linkage committee and the letter of assurances would be issued to all the recommended cases, after approval by competent authority, in accordance with the provisions of new coal distribution policy.
4. New Coal Distribution Policy
A new coal distribution policy has been circulated with effect from October 18th 2007 which, inter alia, envisages meeting the demand of coal from consumers of different sectors of the economy, both on short term and long term basis, in an assured, sustained, transparent and efficient manner with built in commercial discipline. Apart from meeting the requirement upto a satisfaction level through commercially enforceable fuel supply agreement, it also provides for dedicated source of supply through state government nominated agencies, for consumers in small and medium sector, whose annual requirement does not exceed 4200 tonnes per annum. E auction scheme has been reintroduced with certain additional features, so that long term requirements can also be accessed through e auction.
5. Allocation of coal blocks
During 2007, 50 coal blocks have been allocated to eligible end users. The sector wise coal blocks allocation during 2007 is given as below:
| Blocks allocated | Number of blocks | Gross reserve |
| Allocated blocks | 50 | 11409.34 |
| For power generation | 25 | 8870.66 |
| 1. Govt companies | 15 | 6611.76 |
| 2. Private companies | 9 | 1286.01 |
| 3. UMPP | 1 | 972 |
| For iron & steel production | 6 | 465.59 |
| 1. Govt companies | 1 | 108.8 |
| 2. Private companies | 5 | 356.79 |
| For commercial mining | 17 | 1847.75 |
| 1. Govt companies | 17 | 1847.75 |
| 2. Private companies | 0 | 0 |
| For cement production | 2 | 225.34 |
| 1. Govt companies | 0 | 0 |
| 2. Private companies | 2 | 225.34 |
Assuming mineable reserves as 60% of the gross reserves and a 30 year life cycle, these reserves will have a production potential of 230 million tonnes per annum.
6. Approval of coal projects
During the year 2007, following 2 coal projects of total capacity 7.285 million tonnes per year with a total capital investment of INR 727.18 crore have been approved by the government.
| Sl no | Name of project | Capacity | Capital investment |
| 1 | Nigahi Expansion | 5 | 259.4 |
| 2 | Jallaram | 2.285 | 467.78 |
| 3 | Total | 7.285 | 727.18 |
Investment in INR crore
7. Opening of coal sector
The companies engaged in production of syn gas through coal gasification and coal liquefaction were made eligible for captive mining in addition to existing ones vide notification dated July 12th 2007. It means that now coal block can be given to private sector foal coal gasification and for coal benefactor.
8. Rates of Royalty
Rates of royalty on coal & lignite have been revised with effect from August 1st 2007. This will increase royalty revenues of coal producing states by about 24%.
9. Miniratna status
Government has conferred the status of Miniratna category I on the following coal companies with effect from the dates shown against each:
i) Coal India Limited with effect from March 15th 2007
ii) Mahanadi Coalfields Limited with effect from March 15th 2007
iii) Northern Coalfields Limited with effect from March 15th 2007
iv) South Eastern Coalfields Limited with effect from March 15th 2007
v) The Western Coalfields Limited (WCL) w.e.f. 15.03.2007.
vi) Central Coalfields Limited with effect from October 4th 2007
This will give them greater autonomy in decision making.
10. Non official directors
For the first time, non official independent directors have been appointed on the boards of CIL and its subsidiary companies.
11. Coal regulator
The ministry of coal has appointed the administrative staff college of India as consultant on need for an independent regulator for coal sector. ASCI has submitted a report & it is being examined in the ministry.
12. Coal sector reforms
a) Guidelines for allocation of captive coal blocks have been revised and independent mining companies are now permitted to seek coal blocks for captive mining provided they have back to back tie up with end user companies.
b) In order to ensure timely development of coal mines and associated end use of projects in the case of allocation of coal blocks to state or central public sector companies, the government has taken a decision to obtain bank guarantee from such government companies also.
c) Ministry of coal has finalized the guideline for undertaking detailed exploration by the allocatees of unexplored coal blocks in the public and private sectors as well as state governments. This will speed up the process of exploration as allocatees will be able to get the exploration from any agency of their choice.
d) An expert committee set up under the chairmanship of Mr TL Shankar to suggest a road map for the coal sector reforms has since submitted it final report in October 2007. The report is under consideration in the ministry of coal, which will help in coal sector reforms in a big way after it is accepted and implemented.
