COAL INDUSTRY

BY:KAMLESH YADAV

(22)

DIGAR DEV PANDEY (17)

INTRODUCTIONCoal was mined in America in the early 18th century, and

commercial mining started around 1730 in Midlothian, Virginia.

There were many coalfields, but the oldest were in Newcastle and Durham, South Wales, Scotland and the Midlands.

Coal is primarily used for the generation of electricity, with much smaller volumes used for industrial process heat and in steel production.

Over 40 percent of the world’s electricity is produced from coal. As such, it is an important fuel source and will remain so for decades due to its low cost and abundance.

Country Mt % of world total

China 3576 45.9

USA 1004 12.9

India 586 7.5

Australia 414 5.3

Indonesia 376 4.8

Russia 334 4.3

South Africa 253 3.3

Germany 189 2.4

Poland 139 1.8

Kazakhstan 117 1.5

Rest of the world 795 10.3

TOTAL 7 783 100

Production Of Coal By Country (Million Tonnes)

Major Exporters Mt

Indonesia 309

Australia 285

Russian Federation 99

United States 85

Colombia 76

South Africa 70

Kazakhstan 34

Canada 24

Vietnam 23

Mongolia 22

Others 14

Total 1 041

Major Importers Mt

China 177

Japan 175

Korea 129

India 101

Taiwan 66

Germany 41

United Kingdom 32

Turkey 24

Italy 23

Malaysia 21

Others 213

Total 1 002

WORLD COAL RESERVES AND CONSUMPTION

USA - 27.1%

Russia - 17.3%

China - 12.6%

India - 10.2%

Australia - 8.6%

Poland - 93%

South Africa - 93%

Australia - 93%

China - 78%

Israel - 71%

RESERVES CONSUMPTION

CHINESE COAL INDUSTRYThe Chinese coal industry is the world’s largest in terms of productionIts annual production totaled 3576 Mt in 2011 and it imports 177 Mt in 2011.Apart from energy, coal is used in the chemical and pharmaceutical industries.Chinese coal industry operated through a network of 6,645 enterprises.

Major Players:

Shenhua Group: With annual production at more than 185 million tons, Shenhua Group ranks first in the country in terms of production. China National Coal Group Corp: This is the second largest coal producer, with an annual coal output of more than 87 million tons. Datong Coal Mine (Shanxi Province): China’s third-largest coal producer is government owned. The annual coal output is about 61 million tons. Yanzhou Coal and China Coal: This commands the fourth position in the Chinese coal industry, with an annual output of more than 35 million tons.

US COAL INDUSTRYThe US coal industry commands the first position in the world in terms of total reserves. With an annual output of 1004 million tons in 2011, it ranked second in coal production. A major portion of this production catered to the domestic consumption.Coal is the backbone of electricity generation in the U.S. The U.S. relies on coal for about half of its power generation, compared with about 20% of gas.

Major Players

1 Peabody Energy Corp 2 Rio Tinto Energy America 3 Arch Coal Inc 4 Foundation Coal Corp 5 CONSOL Energy Inc 6 Massey Energy Co 7 NACCO Industries Inc 8 Westmoreland Coal Co

INDIA COAL INDUSTRY:The Indian coal industry is the world’s third largest in terms of production and fourth largest in terms of reserves. Around 70% of the total production is used for electricity generation and the remaining by the steel, cement and other heavy industries.

The first coal mining operation commenced in 1774 in the Raniganj coalfield on the banks of River Damodar.

Till independence, the Indian coal industry witnessed sporadic phases of growth. Since the private sector followed unscientific methods, productivity was low. The Indian government took steps to correct this and improve the working conditions in the nation’s coal industry. All privately owned coal producing companies were nationalized under the Coal Mines (Nationalization) Act.

Major Players:

Coal India Limited

Singerani Collieries Company

% SHARE OF COMMERCIALPRIMARY ENERGY RESOURCES

- INDIA

2%2%

9%

36%

51%

HYDRO NUCLEAR NATURAL GAS OIL COAL

COAL INDIA LIMITEDCoal India Limited (CIL) as an organized state owned coal mining corporate came into being in November 1975.

CIL today is the single largest coal producer in the world with 433 MT per annum.

Operating through 81 mining areas CIL is an apex body with 7 wholly owned coal producing subsidiaries and 1 mine planning and Consultancy Company spread over 8 states of India.

CIL also manages 200 other establishments like workshops, hospitals etc. It also owns 26 technical & management training institutes and 102 Vocational Training Institutes Centers.

It was granted the Maharatna recognition in April 2011.

COAL PRODUCTION OF CIL

2007-08 2008-09 2009-10 2010-11 2011-12340

350

360

370

380

390

400

410

420

430

440

Mt400

415423

433

372

Year

NET PROFIT OF CIL

2007-08 2008-09 2009-10 2010-11 2011-120

2000

4000

6000

8000

10000

12000

14000

16000

Rs in Crores

2079

9262 10867

14788

5243Rs. In Crores

Year

SUBSIDIARY COMPANIES OF CIL1. Eastern Coalfields Limited (ECL), Sanctoria, West Bengal

2. Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand

3. Central Coalfields Limited (CCL), Ranchi, Jharkhand

4. South Eastern Coalfields Limited (SECL), Bilaspur, Chhattisgarh

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

6. Northern Coalfields Limited (NCL), Singrauli, Madhya Pradesh

7. Mahanadi Coalfields Limited (MCL), Sambalpur, Orissa

8. Coal India Africana Limitada, Mozambique

9. The consultancy company is Central Mine Planning and Design Institute Limited (CMPDIL), Ranchi, Jharkhand.

INDUSTRY ANALYSIS AND TRENDS

PORTER’S FIVE FORCE MODEL

1. Rivalry among existing

firms

2. Threats from

Potential Entrants

4. Bargaining power

of buyers

3. The threat of

substitute

5. Bargaining power

of the supplier

SWOT ANALYSIS

SWOT

STRENGTHS

Labors easily availableLow customs duty on capital equipmenttax holiday

WEAKNESSPoor infrastructure facilities Low innovation capabilities Labor force is highly un-skilled and inexperienced

OPPORTUNITIES

Setting up manufacturing units.Export Potential

THREATS

Foreign InvestmentStricter environment rules restricting coal mining activitiesHigh rate of accidents

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