a brief history of coal mining and coal deposits in india

A Brief History of Coal Mining and Coal Deposits in India

44

CHAPTER 3

A BRIEF HISTORY OF COAL MINING AND COAL DEPOSITS IN

INDIA

Introduction

In the previous Chapter, we have described the important studies conducted in our

research field that we have extensively surveyed and examined for the purpose of our

study. We have also pointed out the research gap to justify our investigation. Now the

present Chapter provides a fascinating description of the historical background of coal

industry in India, nationalization of coalmines and formation of Coal India Limited and

its subsidiaries including Eastern Coalfields Limited. We have also portrayed here Indian

and Global coal scenario and the position of our country in the international field with

regard to coal deposits and future prospect of this vital energy source. The whole matter is

presented in the following sections:

3.1 A Brief History of Coal Mining in India

Historical records show that even in ancient times people used metals and alloys for their

daily living. The Asoka-Pillar, the Pillar in the Kutub-Minar and development of the

Cannons in the early historical period provide ample proofs of the use of molten iron in

ancient times and medieval India. At that time coal was used for melting metals. The

ruins of smithy furnaces and slack hips close to the coal deposits in the Eastern regions

indicate that the coal was used in the metallurgical processing even as early as 2000 years

ago. Ancient scriptures suggest that the name of the Damodar, the main river in the

Eastern India, on the banks of which the reserve of coal is abundant has its origin in the

phrase Dam-Udare-Jahar, i.e. fire in the belly. The names of some villages like

Angarpathra (pot of burnt coal), Kalipahari (Black Mountain) near Asansol in the Eastern

region suggest the existence of coal deposits in these areas and confirm previous

knowledge of the people of these areas in the presence of underground coal deposits long

before the mining operations began. Thus, there are evidences that coal was known as

fuel resource in India. However, there was no record or documentation regarding the coal

industry until the middle of the18th century. Some records show that as far back as in

1774-75 shallow mines were used to be operated first in Raniganj fields of West Bengal,

which is considered the birthplace of coal mining in the Country. 1


45

A systematic survey of coalmines was conducted in 1845-46 and again in 1860, when it

was found that there were about fifty collieries in the area producing 28,200 tonnes of

coal. At first, coal mining was limited to the Raniganj Coalfields but during the later part

of the 19th Century, exploration started elsewhere in the country. At the beginning of the

20th century, coal production in India reached 6 million tonnes. During the First World

War period, increased demand for coal gave impetus to the development of coal industry.

In 1919, the production of coal rose to 21 million tonnes. In subsequent years, the

industry suffered a setback due to great depression just after the World War 1. 2

The years from 1937 to 1942 constituted another important period, when international

demand for coal steadily rose. Meanwhile, quite a number of quarries and pits were

operated in the Raniganj, Orissa, and Madhya Pradesh Coalfields. The Coal Mining

Committee set up by the Imperial Govt., submitted their report in 1936 on the measures

for securing safety and preventing waste of available coal. In the year 1945, the Singareni

Collieries Company Limited (SCCL) was formed as the first Government owned Coal

Company in the country. In that year, Government of Nizam of Hyderabad bought all the

shares of the company and brought the company under India Trust Fund of the Niza m

Government. The said company actually started production in 1889 at Yellandu area of

present Andhra Pradesh and raised 60,000 tonnes of coal in that year. 3

In 1947, India achieved its independence. Subsequently Five Year Plans were launched

with ambitious targets of coal production. Realizing the importance of coal to the

development of India, our motherland, National Coal Development Corporation (NCDC)

was set up in 1956. Most collieries belonging to the Indian Railways were transferred to

the NCDC to bring about rationalization in coal industry. NCDC brought a major change

in the lives of the coal miners and their standard of living. In 1960, coal industry suffered

a setback in as much as demand could not consume supply. This was due to slippages in

achieving targets by steel, power and other industries. During the sixties, the coal industry

passed through a period of cheap availability of oil. The situation, however, took a radical

turn in the seventies due to spiraling up of oil prices resulting in hike in coal demand. The

Central Government took the decision to bring coalmines under the State Control. This

was the last phase of coal industry in the hands of the private owners. It is important to

note that at that time the private owners were producing nearly 75 percent of the total coal


46

production. There was a complete anarchy and chaos in the production and distribution of

coal in spite of increase in demand for coal.

Considering the above facts and for proper safety and security of the miners, conservation

of coal, and systematic mining to meet increasing demand of coal especially from Iron

and Steel companies and power (thermal) companies, the Government of India, on

October 16, 1971, promulgated the Coking Coal Mines (Emergency Provisions) Act,

1971. Thereafter, Government of India took over the management of all 226 coking

coalmines except captive mines of IISCO, TISCO and DVC, subsequently nationalized

them on May 1, 1972, and brought under the control of newly formed Bharat Coking

Coal Limited (BCCL) to look after the coking coalmines and for streamlining its

production. Consequently, the private owners of non-coking coalmines stopped further

investment and started violating the safety laws and underpaying workers for short-term

gain, as they were afraid of further nationalization of non-coking coal mines very soon.

Thus, keeping all these factors in consideration Government took over the management of

all 711 non-coking coalmines of the country, then operating, on January 30, 1973 and

subsequently nationalized them on May 1, 1973 and thus a new era began. In order to

provide for a higher growth in coal sector to meet the growing energy needs of the

country, the Government nationalized coalmines by enacting through the Parliament the

Coal Mines Nationalization Act in 1973. The section III of the Act says, No person,

other than the Central Government or a Government Company or a Corporation owned,

managed or controlled by the Central Government shall carry on coal mining operation in

India. Thereafter, pursuant to the nationalization of coalmines, all non-coking coalmines

were brought under Coal Mines Authority Limited (CMAL), which was incorporated as

a government company under the Companies Act 1956, on June 14, 1973, having three

divisions, Eastern Division, Western Division and Central Division. The CMAL was then

under the administrative control of the Department of Coal, Ministry of Energy,

Government of India.

On November 1, 1975, the Department of Coal, Ministry of Energy, and Government of

India incorporated the present Coal India Limited (CIL) as a holding company. The

objective was to integrate and streamline the structural set up and to bring both coking

and non-coking coalmines in one controlling unit that was to be responsible for the entire

coal mining sectors owned and controlled by the Central Government. Then BCCL and


47

all the three divisions of earlier CMAL were incorporated as Subsidiary companies of

CIL. Eastern Division of CMAL was converted into Eastern Coalfields Limited (ECL),

Western Division into Western Coalfields Limited (WCL) and Central Division into

Central Coalfields Limited (CCL). With that, one more subsidiary company called

Central Mine Planning and Design Institute Limited (CMPDIL) was incorporated for

planning, design and engineering consultancy services of the coalmines. Again, for the

better control of the mining operations and for enhancing production, few mines were

reorganized on January 1, 1986 and two new subsidiaries came into sight, one from WCL

called South Eastern Coalfields Limited (SECL) and another from CCL named as

Northern Coalfields Limited (NCL). Further reorganization took place on April 1992 and

again one more subsidiary came into existence from SECL named as Mahanadi

Coalfields Limited (MCL).This way, eight subsidiaries of Coal India Limited came into

existence. 4

3.2 The Chronological Sequence of Restructuring of Coal Industry in India

The Chronological sequence of restructuring of coal industry in India is presented in

Figure 3.1 in the next page showing the position of the present Coal India Limited (CIL),

the main coal producing public sector company in India and all the subsidiaries including

Eastern Coalfields Limited (ECL), the subsidiary selected for our research study. 5 Figure

3.1 shows that there are certain mines, which are beyond the control of CIL. These are:

1) Captive coking coal mines of Tata Iron & Steel Company Limited (TISCO),

2) Captive coking coal mines of Indian Iron & Steel Company Limited (IISCO),

3) Captive Non-coking coal mines of Damodar Valley Corporation (DVC),

4) Non-coking coalmines of Singareni Collieries Company Limited (SCCL), jointly

owned by Andhra Pradesh Government and Government of India with equity sharing

in the ratio of 51:49. 6

These are sequentially shown in Figure 3.1 in the next page and necessary explanations

are given after presentation of the Figure.


48

Chronological Sequence of Restructuring of Coal Industry in India

Singareni Collieries Company

Ltd. (SCCL)

Non-Coking Coal.

1945, SCCL

Private Sector Mines.

Coking Coal.

TISCO /

IISCO

May, 1972 Coking

Coalmines Nationalized

Bharat Coking Coal Ltd. (BCCL)

Non-Coking Coal.

Captive Mines of

DVC.

May, 1973 Non-Coking Coalmines

Nationalized

State Railways Collieries.

National Coal Develoupment Corporation

(NCDC) 1956.

Coal Mines Authority

Ltd. (CMAL)

November, 1975, Formation of Coal India Limited as Holding Company

North Eastern Coalfields (NEC)

ECL, BCCL, CCL, WCL, CMPDIL

January 1, 1986 Reorganization

NEC

Dankuni Coal Complex (DCC)

ECL, BCCL, CCL, NCL, WCL, SECL, CMPDIL

April, 1992 Further Reorganization

DCC

NEC

ECL, BCCL, CCL, NCL, WCL, SECL, MCL, CMPDIL

Figure 3.1: Chronological Sequence of Restructuring of Coal Industry in India

Source: Glimpses of Coal India (2006), CIL, Kolkata


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Figure 3.1 exhibits that the CIL, at present, has eight Indian Subsidiaries as discussed

afterwards. It has another subsidiary in Africa as is mentioned below. Out of these, eight

subsidiaries are producing companies whereas CMPDIL is an engineering, design and

exploration company for preparing perspective plans, rendering consultancy services and

undertaking exploration and drilling work for establishing coal reserves in the country.

CIL and its Indian subsidiaries are incorporated under the Companies Act, 1956 and are

wholly owned by the Central Government. The coal mines of Assam and its neighboring

areas are controlled directly by CIL under North Eastern Coalfields (NEC), a small coal

producing unit operating in Margherita, Assam and Dankuni Coal Complex (DCC) is a

low temperature carbonization plant in India leased out by CIL to SECL. The list of all

the subsidiaries of CIL is given below:

1) Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand;

2) Central Coalfields Limited (CCL), Ranchi, Jharkhand;

3) Eastern Coalfields Limited (ECL), Sanctoria, Asansol, West Bengal;

4) Mahanadi Coalfields Limited (MCL), Sambalpur, Orissa;

5) Northern Coalfields Limited (NCL), Singrauli, Madhya Pradesh;

6) South Eastern Coalfields Limited (SECL), Bilaspur, Chhattisgarh;

7) Western Coalfields Limited (WCL), Nagpur, Maharashtra.

8) Central Mine Planning and Design Institute Limited (CMPDIL), Ranchi, Jharkhand;

9) Coal India Africana Limited, Mozambique, Africa. ( an international subsidiary of

CIL)

Coal India Limited (CIL) is a Maharatna designated Public Sector Undertaking under

the Ministry of Coal, Government of India, which has its headquarters in Kolkata, West

Bengal. Coal India limited (CIL) is the single largest coal producing company in the

world, based on its raw coal production of 431.32 million tonnes in the fiscal ended 2011.

In fiscal 2009, coal produced by CIL accounted for 81.9 % of coal production of India.

The Coal India Limited (CIL) is the largest coal producing company and reserve holder in

the world.7 It is the second largest corporate body in the world and is the largest

corporate employer in India. It produces non-coking coal and coking coal of various

grades for diverse applications. The range of products includes raw coal (coking and non-

coking), washed coal, soft coke & hard coke, coal tar, coal gas, coal chemicals etc. As on

March 31, 2010, CIL was operating 471 mines in 21 major coalfields across eight states

in India, including 163 open cast mines, 273 underground mines and 35 mixed mines


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(includes both open cast and underground mines). 8 It was also operating 17 coal

beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million

tons per annum. It intends to develop additional 20-coal beneficiation facilities with an

aggregate additional proposed feedstock capacity of 111.10 million tonnes per annum.

Coal India's major consumers are the power and steel sectors. Others include cement,

fertilizer, brick kilns etc.

CIL had featured in FE 500 a Financial Express Research Bureau compilation brought

out by The Indian Express, daily news, in March 2011. In fact, CIL was among the

super league of top 10 firms and occupied a composite rank of 5th (for 2010). In terms of

Gross Profit CIL was ranked 5th and was among the top 10 in terms of market

capitalization.9

3.3 Coal Deposits in India

India is rich in coal deposits and occupies fourth position in global coal reserve after the

USA, Russia and China. According to Geological Survey of India (GSI), as on April 1,

2008 reserves of coal in India up to a depth of 1200 meters was 264.54 billion tonnes, of

which 28.5 percent and 24.7 percent were in the states of Jharkhand and Orissa

respectively whereas the remaining reserves were in other states as are discussed in the

latter part of this section. 10

There are different types of coal found in India and other countries. In general, coal is

classified into four categories. They usually range from lignite, through sub bituminous

and bituminous, to anthracite, reflecting the progressive response of individual deposits of

coal to increasing heat and pressure. The carbon content of coal supplies most of its

heating value, but other factors also influence the amount of energy it contains per unit of

weight. Lignite is a geologically young coal which has the lowest carbon content, 25-35

percent, and a heat value ranging between 4,000 and 8,300 BTUs (British thermal units

which is used to express the amount of energy in coal) per-pound. Sometimes called

brown coal, it is mainly used for electric power generation. Bituminous coal is the most

plentiful form of coal available in the United States. This coal is used primarily to

generate electricity and make coke for the steel industry. Bituminous coal has a carbon

content ranging from 45 to 86 percent carbon and a heat value of 10,500 to 15,500 BTUs-


51

per-pound. Ranking below bituminous is subbituminous coal with 35-45 percent carbon

content and a heat value between 8,300 and 13,000 BTUs-per-pound. Reserves are

located mainly in a half-dozen Western states and Alaska. Although its heat value is

lower, this coal generally has a lower sulfur content than other types, which makes it

attractive for use because it is cleaner burning. The coal that has the highest carbon

content, between 86 and 98 percent, and a heat value of nearly 15,000 BTUs-per-pound is

called Anthracite coal. This coal is frequently associated with home heating and occupies

a very small segment of the U.S. coal market. There are 7.3 billion tons of anthracite

reserves in the United States and is found mostly in 11 North Eastern counties in

Pennsylvania.

The Indian coal deposits are primarily concentrated in the Gondwana sediments occurring

in the Eastern and Central parts of Peninsular India. The Indian coal mainly consists of

bituminous and sub-bituminous varieties that rank below anthracite variety, which is

regarded as the best kind of coal. In India, bituminous and sub bituminous coal is used

primarily to generate electricity and make coke for the steel industry. Further, the Tertiary

coal bearing sediments are also found in North-Eastern India, spreading over the states of

Assam, Arunachal Pradesh, Nagaland and Meghalaya of which the Assam Coalfields are

the prominent ones. Here coalfields are highly disturbed tectonically and with high

sulphur contents. 11

Based on availability, India mainly produces two types of coal. These are coking coal and

non-coking coal. Coking coals are those coals, when heated in the absence of air, form

coherent beads, free from volatiles, with strong and porous mass, called coke. Thus, these

coals have coking properties and are mainly used in steel making and metallurgical

industries. For that reason, these coals are also known as metallurgical coal. In contrast,

non-coking coals do not have such coking properties. These are mainly used as thermal

grade coal for power generation and also used for cement, fertilizer, glass, ceramic, paper,

chemical and brick manufacturing, and for other heating purposes.

Depending on the quality of coke produced from them, coking coal is sub-divided into

prime coking coal, medium coking coal and semi-coking coal. For example, semi-coking

coals have reasonably less coking properties than prime coking coals and moderately less

coking properties than medium coking coals. These coals are blended with coking coals


52

in adequate proportion to make coke. Thus, these are mainly used as blend-able coal in

steel making, merchant coke manufacturing and other metallurgical industries. Similarly,

non-coking coal is classified in seven grades (Grades A to G) depending on its

caloric values, which is exhibited in Table 3.1 below. Indian coal is, actually, categorized

based on Useful Heat Value (UHV) in case of non-coking (Steam) coal and based on ash

contents in case of coking coal. The useful value is calculated following the formula:

UHV= 8900-138 (A+M), where UHV means useful heat value in Kcal/Kg, A

indicates ash content in percentage and M indicates moisture content in percentage.

Similarly, gross calorific value (Kcal/Kg) is calculated following the formula, GCV =

91.7 F + 75.6 (V 0.1 A) 60M, where F, V, A and M denote moisture, ash, volatile matter

and fixed carbon all in percent air-dried, respectively.12

Price of coal, thus, varies according to their coking properties and further according to the

different grades of coal in case of non-coking coal. Prime coking coal fetches the highest

value as compared to the medium and semi-coking coal. Similarly, in case of non-coking

coal, grade A gets the highest value as compared to the other grades and so on. Thus,

the subsidiaries, which have more reserves of coking coal and higher grade of non-coking

coal, are in a better position to fetch better market price for their product. For example,

BCCL gets better prices by selling coking coal and ECL gets higher prices by selling non-

coking coals from S.P mines and Raniganj coalfields as compared to other subsidiaries.

Table 3.1: Various Grades of Non-coking coals

Grade Useful Heat Value (Kcal/Kg)

UHV= 8900-138 (A+M) Gross Calorific Value (GCV) (Kcal/Kg)

(at 5% moisture level)

A Exceeding 6,200 Exceeding 6,401

B Exceeding 5,600 but not exceeding 6,200 Exceeding 5,800 but not exceeding 6,401

C Exceeding 4,940 but not exceeding 5,600 Exceeding 5,400 but not exceeding 5,801

D Exceeding 4,200 but not exceeding 4,940 Exceeding 4,800 but not Exceeding 5,401

E Exceeding 3,360 but not exceeding 4,200 Exceeding 4,200 but not exceeding 4,801

F Exceeding 2,400 but not exceeding 3,360 Exceeding 3,600 but not exceeding 4,201

G Exceeding 1,300 but not exceeding 2,400 Exceeding 3,200 but not exceeding 3,601

Source: http:// www.coalindia.in

Now before providing total reserve of Indian coal in detail we would like to explain three

terms that are used to categorize that reserve. These are Proved Reserve, Indicated


53

Reserve and Inferred Reserve. The coal reserves that are not only considered recoverable

but can also be recovered economically are called Proved Reserves. Thus, a proven

recoverable reserve is the tonnage of coal that has been proved by drilling etc. and is

economically and technically extractable. This means they take into account what current

mining technology can achieve and the economics of recovery. For that reason, proved

reserves will change according to the price of coal; if the price of coal is low, proved

reserves will decrease. The estimate of the quantity of coal available in an area, which is

considered good, and the depth at which coal can be exploited is reasonable, is termed as

Indicated Reserve. Indicated reserves differ from proved reserves in the way that

indicated reserves are estimated with a lower degree of confidence than proved reserves.

The term Inferred Reserve refers to the rough estimate of the quantity of available coal

made during a survey, which is called regional survey. However, total coal resources

indicate the amount of coal that may be present in a deposit or coalfield. This does not

take into account the feasibility of mining the coal economically. Not all resources are

recoverable using current technology. 13

We have already mentioned that as per GSI compilation of reserves data as on April 1,

2008, total reserve of coal in India up to a depth of 1200 meters is 264.54 billion tonnes,

comprising proved, indicated & inferred categories, of which 28.5 percent and 24.7

percent are in the states of Jharkhand and Orissa respectively whereas the remaining

reserves are in other states. However, total coal reserves, as on April 1, 2007 was 257.38

billion tonnes. Thus, there is an increase in the reserve of coal as on April 1, 2008.

Further, out of these total reserves as on April 1, 2008 only 101.83 billion tonnes are of

proved category, 124.22 billion tonnes are indicated and remaining 38.49 billion tonnes

are of inferred category. While 4.6 billion tonnes of proved reserves belong to prime

coking category, other coking reserves are 12.3 billion tonnes. Proved reserves of non-

coking coal increased from 81.6 billion tonnes as on April 1, 2007 to 84.4 billion tonnes

as on April 1, 2008.

In addition, Neyveli Lignite Corporation (NLC) coordinates and reviews the regional

exploration work concerning lignite reserves. Lignite is a low grade brown coloured

geologically young coal that has the lowest carbon content, 25-35 percent, and a heat

value ranging between 4,000 and 8,300 BTUs-per-pound. Because of its colour,

sometimes, this coal is called brown coal. This coal is mainly used for electric power


54

generation. Total lignite reserve in the country as on April 1, 2007 was 38.76 billion

tonnes, which further increased to 38.93 billion tonnes as on April 1, 2008. Out of the

total lignite reserves, Tamilnadu accounts for 31.33 billion tonnes (80.83 percent) while

Rajasthan accounts for 4.48 billion tonnes (11.6 percent). 14

Detailed data on Coal reserves excluding lignite reserve, up to a depth of 1200 meters as

on April 1, 2008, by type of Coal and by different coal bearing States are provided in

Tables 3.2 and 3.3 respectively whereas detailed data on lignite reserves are available in

Table 3.4.

Table 3.2 given below exhibits that Indian coal generally is of non-coking categories,

which is comparatively poorer than coking coal, but is mostly sought after item for power

sectors. Nonetheless, the country has a good amount of reserve in proved and indicated

categories giving a beneficial position for electricity generation.

Table 3.2: Inventory of Coal by Type as on April 1, 2007 & 2008

Types of coal As on Reserve (Million Tonnes)

Proved Indicated Inferred Total

Prime coking 01/04/2007

01/04/2008

4,614

4,614

699

699

0

0

5,313

5,313

Medium coking 01/04/2007

01/04/2008

11,853

12,308

11,601

12,136

1,880

1,880

25,334

26,324

Blendable / Semi coking 01/04/2007

01/04/2008

482

482

1,003

1,003

222

222

1,707

1,707

Non coking

(including high sulphur)

01/04/2007

01/04/2008

81,624

84,425

1,07,362

1,10,378

36,042

36,388

2,25,027

2,31,191

Total 01/04/2007

01/04/2008

98,573

1,01,829

1,20,665

1,24,216

38,144

38,490

2,57,382

2,64,535

Source: Coal Directory of India (2007-08), Coal Controllers Organization, Kolkata, p. II.5

Table 3.3 showing state wise reserve of Indian coal in the next page exhibits that

Jharkhand occupies the highest amount of coal reserve, Orissa occupies the second

highest reserve and Chhattisgarh has the third highest figure of coal reserve whereas West

Bengal has the fourth position as regard to the coal reserve. Further, Jharkhand is the only

state that occupies coking coal, which is mostly operated by BCCL and ECL.


55

Table 3.3: Geological Resources of Indian Coal by State and Depth as on April 1, 2008.

State Type of coal Depth Reserve (Million Tonnes)


West Bengal Medium Coking

Semi Coking

Non Coking

All

0-1200

0-1200

0-1200

0-1200

210.00

188.05

11186.04

11584.09

18.50

432.49

11229.06

11680.05

0.00

168.23

4902.47

5070.70

228.50

788.77

27317.57

28334.84

Jharkhand Prime Coking

Medium Coking

Semi Coking

Non Coking

All

0-1200

0-1200

0-1200

0-1200

0-1200

4614.35

11743.02

223.34

20912.21

37492.92

698.71

10557.60

471.55

19901.04

31628.90

0.00

1607.40

53.45

4677.47

6338.32

5313.06

23908.02

748.34

45490.72

75460.14

Madhya Pradesh Medium Coking

Non Coking

All

0-1200

0-1200

0-1200

354.49

7541.47

7895.96

1560.11

8322.26

9882.37

272.83

2508.80

2781.63

2187.43

18372.53

20559.96

Chhattisgarh Semi Coking

Non Coking

All

0-1200

0-1200

0-1200

70.77

10348.55

10419.32

99.25

29172.90

29272.15

0.00

4442.57

4442.57

170.02

43964.02

44134.04

Uttar Pradesh All Non Coking 0-300 765.98 295.82 0.00 1061.80

Maharashtra All Non Coking 0-1200 5004.26 2821.66 1992.17 9818.09

Orissa All Non Coking 0-1200 19221.59 31728.09 14313.66 65263.34

A. Pradesh All Non Coking 0-1200 9007.13 6710.65 2978.81 18696.59

Sikkim All Non Coking 0-300 0.00 58.25 42.98 101.23

Assam Non Coking

High Sulphur

All

0-1200

0-1200

0-1200

0.00

314.59

314.59

2.79

24.04

26.83

0.00

34.01

34.01

2.79

372.64

375.43

Arunachal Pradesh All High Sulphur 0-300 31.23 40.11 18.89 90.23

Meghalaya All High Sulphur 0-300 88.99 69.73 300.71 459.43

Nagaland All High Sulphur 0-300 3.43 1.35 15.16 19.94

India

Prime Coking

Medium Coking

Semi Coking

Non coking

High sulphur

Total

0-1200

0-1200

0-1200

0-1200

0-1200

0-1200

4614.35

12307.51

482.16

83987.23

438.24

101829.49

698.71

12136.21

1003.29

110242.52

135.23

124215.96

0.00

1880.23

221.68

36018.93

368.77

38489.61

5313.06

26323.95

1707.13

230248.68

942.24

264535.06

India (Total)

Tertiary Coalfields

Gondwana Coalfields

GRAND TOTAL

0-1200

0-1200

0-1200

438.24

101391.25

101829.49

135.23

124080.73

124215.96

368.77

38120.84

38489.61

942.24

263592.82

264535.06

Source: Coal Directory of India (2007-08), Coal Controllers Organization, Kolkata, p. II.7-12


56

Table 3.4, given below, showing state-wise reserve of Lignite, exhibits that Tamilnadu

takes up the highest position dominating other states so far as reserve of Lignite is

concerned. However, Rajasthan and Gujarat occupy second and third positions

respectively. Further, we also observe that there is slight improvement in reserve of

Lignite as on April 1, 2008 and this is mainly due to improvement in reserve in Rajasthan.

Table 3.4: State-wise Reserve of Lignite as on April 1, 2007 & 2008

State As on Reserve (Million Tonne)


Gujarat 1/4/2007 785.27 259.40 1618.08 2662.75

1/4/2008 785.27 259.40 1618.08 2662.75

J & K 1/4/2007 0.00 20.25 7.30 27.55

1/4/2008 0.00 20.25 7.30 27.55

Kerala 1/4/2007 0.00 0.00 9.65 9.65

1/4/2008 0.00 0.00 9.65 9.65

Pondicherry 1/4/2007 0.00 405.61 11.00 416.61

1/4/2008 0.00 405.61 11.00 416.61

Rajasthan 1/4/2007 560.91 2620.60 1129.92 4311.43

1/4/2008 639.69 2568.30 1276.84 4484.83

Tamilnadu 1/4/2007 2831.00 23387.42 5108.60 31327.02

1/4/2008 3399.39 22819.03 5108.60 31327.02

West Bengal 1/4/2007 0.00 0.29 0.86 1.15

1/4/2008 0.00 0.29 0.86 1.15

All India 1/4/2007 4177.18 26693.57 7885.41 38756.16

All India 1/4/2008 4824.35 26072.88 8032.33 38929.56

Source: Coal Directory of India (2007-08), Coal Controllers Organisation, Kolkata, p. II.5

Coal Reserve of ECL

Estimates of the total geological reserves down to a depth of 1200 metres from surface in

West Bengal and 600 metres from surface at Jharkhand as on April 1, 2010 (as per GSI)

stood at 29.723 billion tonnes in West Bengal and 16.396 billion tonnes in Jharkhand.

The total comes to 46.119 billion tonnes. Of these reserves, 15.837 billion tonnes are

proved, 23.754 billion tonnes are indicated and 6.528 billion tones are estimated. 15


57

The Raniganj coal is the best type of non-coking coal reserves in the country. It has

higher quality and low ash content (less than 20%) and is most suited to Power Utilities.

It can reduce the import of coal to meet the demand of our power plants. Coal of Barakar

generally is of inferior quality, which occurs mainly in Jharkhand State. However, it is

suitable for modern powerhouses & other small-scale industries.

3.4 Global Scenario of Coal

3.4.1 Global Reserve

Although coal resources are widely distributed around the world, countries depending on

coal for domestic energy or export revenue are mostly blessed with the concentration of

proven coal reserves. While OECD-North America and the Transition Economy countries

controlled 40 percent and 23 percent of the proved coal reserves respectively, about 19

percent of proved coal reserves are in China and 11 percent in South Asia. Thus, almost

93 percent of proved coal reserves are concentrated in these four regions. Therefore, the

outlook for coal production in these four countries will dominate the future of global coal

production. As per latest study done in 2006 by German Federal Institute for Geosciences

and Natural Resource, proved coal reserves including anthracite, bituminous, sub

bituminous and lignite, stands at 1019 BT (Billion tonnes). The Region-wise detail of

reserve is shown below in Table 3.5 and in Figures 3.2 & 3.3 and 3.4 in the next page. 16

Table 3.5: World Coal Reserve

Region Reserve in 2006 (Mt)

Hard coal % Lignite % Total %

OECD-North America 278,617 38 128,467 45 407,084 0.40

Transition Economies 112,198 15 118,260 42 230,458 0.23

China 167,000 23 25,000 9 192,000 0.19

Asia Ex. China 105,682 14 11,131 4 116,813 0.11

L. America 19,769 3 124 0 19,893 0.02

Africa & M. East 52,846 7 202 0 53,048 0.05

Total 736,112 100 283,184 100 1019,296 100.00

Source: The Coal Directory of India, 2007-2008, pp X.1


58

Graphical presentation of World Coal Reserve

38%

15%

23%

14%

3% 7%

Figure 3.2: Pie Chart showing Reserves of Hard Coal in 2006 (in %)

OECD

Tr. Economies

China

Asia Ex. China

L. America

Africa & M. East

45%

42%

9% 4%

0% 0%

Figure 3.3: Pie Chart showing Reserves of Lignite Coal in 2006 (in %)

OECD

Tr. Economies

China

Asia Ex. China

L.America

Africa & M.East

OECD-North America

40%

Transition Economies

23%

China 19%

Asia Ex. China 11%

L. America 2%

Africa & M. East 5%

Figure 3.4: Pie Chart showing Total Coal Reserve in 2006 (in %)


59

Figure 3.2 given in the previous page exhibits that OECD-North America occupies the

highest global reserve of hard coal containing 38 % of the reserve. China holds the second

position occupying 23 % of the global hard coal reserve, Transition Economy countries

occupy the third place containing 15 % of the reserve and Asia excluding China occupies

the fourth position holding 14 % of the global hard coal reserve and so on.

Figure 3.3 given in the previous page displays that almost all the reserves of Lignite are

concentrated in the four regions. OECD-North America again occupies the highest global

reserve of lignite containing 45 % of the reserve. Transition Economy countries hold the

second position occupying 42 % of the global lignite reserve, China occupies the third

place holding 15 % of the reserve and Asia excluding China occupies the fourth position

holding 14 % of the global lignite reserve and so on.

Figure 3.4 given in the previous page exhibits that while OECD-North America and the

Transition Economy countries controlled 40 percent and 23 percent of the proved coal

reserves respectively, about 19 percent of the proved coal reserves are in China and 11

percent in South Asia. Thus, almost 93 percent of proved coal reserves are concentrated

in these four regions whereas other countries occupy only 7 % of the total global coal

reserve. Therefore, we understand that the outlook for coal production in the stated four

regions will dominate the future of global coal production.

Global Coal Reserves as of 2010: More recent study by World Coal Association reveals

that there are over 847 billion tonnes of proven coal reserves worldwide. The study

estimates that the USA has the largest share of the global resource (25.4%) followed by

Russia (15.9%), and China (11.6%). India is the fourth in the list with 8.6 % of the global

resource. The study further indicates that there is enough coal to last us around 118 years

at current rates of production. In contrast, proven oil and gas reserves are equivalent to

around 46 years and 59 years respectively at the current production level. Further, around

62 % of oil and 64 % of gas reserves are concentrated in the Middle East and Russia. 17

3.4.2 Production and Consumption of Coal A Global View.

In 2006, the production of global coal industry stood at 6142 MT, of which hard coal

stood at 5205 MT and brown coal was 937 MT. In 2010, production of hard coal rose to

6185 MT and brown coal to 1042 MT (Source: World Coal Association). The top four


60

coal producing countries are China, USA, Australia and India. 18 Until 2006, the global

coal market saw some sort of equilibrium between demand and supply of coal because

China used to export coal. From the year 2007 onwards, Chinas own rising demand for

coal for its power plants saw the country enter into the global market as a buyer

aggressively. According to the International Energy Association (IEA), China has become

bigger consumer of electricity than the USA in the year 2009. China occupies the first

place in both production and consumption. Further, now instead of exporting, it is

importing coal. Consequently, it has become now one of the biggest importers of coal after

Japan. In India, too the rapid demand for coal is seeing an increasing dependence on

imports. We observe from the Tables that India occupies third position in both production

and consumption. This fact confirms a huge demand of coal that cannot be met from

indigenous production. The global position of different countries as of 2010 with regard to

coal production and consumption is exhibited in the Tables 3.6 and 3.7. 19

Table 3.6 displays the names of the top five countries with regard to production and

consumption of hard coal as of 2010 whereas Table 3.7 displays the names of the top five

countries with regard to production of brown coal. We find Germany occupies the highest

position in producing brown coal; Indonesia occupies the second position whereas

Australia has the fifth position in producing brown coal and so on.

Table 3.6 Production and Consumption of Hard Coal of Top Five Countries as of

2010 (in MT)

Production (Hard Coal) Consumption

Country Quantity Position Country Quantity Position

China 3162 First China 3421 First

USA 932 Second USA 1085 Second

India 538 Third India 628 Third

Australia 353 Fourth Russia 342 Fourth

South Africa 255 Fifth Japan 187 Fifth

Source: Business World, RNINO. 39847/81, 5 September 2011, p. 29

Table 3.7: Production of Brown Coal of Top Five Countries as of 2010 (in Mt)

Country Germany Indonesia Russia Turkey Australia

Quantity 169 163 76 69 67

Position First Second Third Fourth Fifth

Source: http://www.worldcoal.org/resources/coal-statistics / Retrieved on 25-5-12


61

3.5 Conclusion

This part of the study provides information on historical background and development of

coal industry in India and formation of Coal India Limited. We come to know how

different subsidiaries of CIL were formed for streamlining and enhancing production of

coal to meet growing energy need of our country. We have also highlighted here Indian

and Global coal reserves and the position of our country in international perspective as far

as coal deposits are concerned. We understand Coal consumption mainly takes place in

the country of origin. On an average, only 15 % of production is exported and 85 % of

produced coal is consumed domestically. Moreover, China and the USA mostly dominate

coal production of the world. China has even totally stopped exporting coal and started

importing whereas the USA exports very little at present. This implies increasing

emphasis on the conservation of domestic coal reserves to meet future energy demand in

the wake of uncertain international energy environment. India should also follow this line

of thinking for the safety and prosperity of our future generations.


62

References:

1. Glimpses of Coal India (2006), CIL, Kolkata, p.1.

2. Internal Official Documents and collected Information.

3. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers

Organisation, Kolkata, p. I.5.

4. Ibid.

5. Glimpses of Coal India (2006), CIL, Kolkata, p.3


Organisation, Kolkata, p. I.6.

7. Annual Report & Accounts (2010-11), CIL, pp. 101-103 and articles.economictimes.

indiatimes.com > collections > Coal India, Retrieved on 25-05-12.

8. http:// www.coalindia.in.

9. Annual Report & Accounts (2010-11), Coal India Limited, p. 37 & 29.


Organisation, Kolkata, pp. II. 1-2.

11. Ibid.

12. Glimpses of coal India (2006), CIL, Kolkata, p. 14.

13. Glimpses of coal India (2006), CIL, Kolkata, p. 14 and

http://www.worldcoal.org/coal/where- is-coal- found, Retrieved on 25-5-12.


Organisation, Kolkata, pp. II. 1-2.

15. http:// www.easterncoal.gov.in


Organisation, Kolkata, p. X.1.

17. http://www.worldcoal.org/resources/coal-statistics / and http://icmlindia. com/global-

coal-scenario , Retrieved on 25-5-12 at 10.50 am.

18. http://icmlindia.com/global-coal-scenario, Retrieved on 25-5-12 at10.10 am.

19. Business World, RNI NO. 39847/81, 5 September 2011, pp. 29-38.