Date : 18-11-11 Baisali Ray MBA(IB) Roll no.

: 1226111108

COAL IN INDIA
ABSTRACT :
Coal is the main commercial energy fuel in India with 69% of electricity derived from coalfired power stations. Ambitious plans by the Indian government to extend the electrification rate from its 2005 level of approximately 44% to the whole population, as well as catering for rapid growth in industrial and household consumption, are driving plans for a massive expansion of installed electricity capacity. The U.S. Geological Survey (USGS) notes in its 2006 review of Indian mining that the existing electricity generating system capacity was 116 gigawatts (GW) and it "needed to acquire an additional generating capacity of 65GW to sustain its economic growth in the next 5 to 10 years". The USGS estimates that 30GW of the additional 65GW could be from coal-fired power stations, with gas contributing 14GW and a further 21GW from new nuclear power stations. While India has coal reserves estimated by the World Coal Institute (WCI) at 92 billion tonnes -- 217 years supply -- it is of low quality as it has a high ash content. In August 2010, the EIA (Energy Information Association) projected that India has coal reserves of 62,300 million short tons.

Introduction :
In India, 80% of mining is in coal and the balance 20% is in various metals and other raw materials such as gold, copper, iron, lead, bauxite, zinc and uranium. Coal has been a major contributor in providing energy security during the past century. Coal is the most important & abundant fossil fuel in India and accounts for 55% of India's energy need. India's industrial heritage was built upon indigenous coal, largely mined in the eastern and the central regions of the country. Coal has been recognized as the most important source of energy for electricity generation in India. About 75% of the coal in India is consumed in the power sector. In addition, other industries like steel, cement, fertilizers, chemicals, paper and thousands of medium and small-scale industries are also dependent on coal for their process
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and energy requirements. As a result of exploration carried out up to the maximum depth of 1200m by the GSI, CMPDI, SCCL and MECL etc, a cumulative total of 285862.21 Million Tonnes of Geological Resources of Coal have so far been estimated in the country as on 1.4.2011. Hard coal deposits spread over 27 major coalfields are mainly confined to eastern and south central parts of India.
Source : Coal (http://www.indiacore.com/coal.html)

Domestic Coal Mining :

Between 1996 and 2005 Indian hard coal production increased from 285 million tonnes to 397.7 million tonnes in 2005. In addition, 37.1 million tonnes were estimated to have been imported in 2005 with a total coal consumption of 433.4 million tonnes. The World Coal Institute estimates that coal demand could grow to 758 million tonnes in 2030.[5] It was reported in May 2011 that Indonesia's coal mining companies were cranking up coal production to meet the fast pace of demand growth, and it was forecast that the country would produce 340 million tonnes of coal in 2011, up from 320 million tonnes in 2010. In 2011 it was reported that India was the third largest miner in the world and will produce around 554 million tonnes of coal, but will burn 696 million. Coal Reserves : A report issued by India think tank, The Energy and Resources Institute (TERI) in December 2009 estimated that the country has approximately 45 years' worth of usable coal reserves. Previous estimates from geological studies had suggested that India had about 267 billion tonnes of coal, including approximately 105 billion tonnes of proven reserves, which could last for up to 200 years. The TERI report said the revised estimate showed the importance of developing policy initiatives for renewable energy, including aggressive promotion of solar energy technologies. TERI's director-general, said that it's a myth that India has a virtually unlimited supply of coal and much of the coal is so deep that it cannot be mined. According to the report, India will have to increase its coal imports to about 1,300 million tonnes per year by 2030, unless initiatives are launched to lessen the country's dependence on coal - if renewable energy initiatives are launched effectively, coal imports could be restricted to 200 million tonnes per year. In August 2010, the EIA projected that India has coal reserves of 62,300 million short tons.

In May 2011, the coal ministry said it plans to redefine the boundaries of 28 coal blocks in the country, to help in improving availability of the essential fuel by 34 per cent. Out of a total 602 coal blocks in nine coalfields in the country, the environment ministry said the available areas for mining in the country would increase by up to 64 per cent from 59 per cent, according to estimates of the coal ministry.

Coal Imports and Exports :

India has almost negligible coal exports, estimated to be at only 1.5 million tonnes in 2005. In 2009, India imported 67 mega tons (Mt) of coal, according to estimates by the World Coal Institute. According to the U.S. EIA, in 2009 India mined 613.4 million short tons of coal, and used 680.9 million short tons. The World Coal Institute puts 2009 India coal production at 526Mt. In 2010, Chairman of Coal India projected that India may import close to 100 million metric tons of coal in the year 2010 - ending March 31, 2011 - to meet growing demand for the fuel from power plants. India generates 70% or more of its electricity by burning coal. Indian coal imports are rising rapidly. From April 2008 through March 2009, the country imported 59 million metric tons (tonnes); from April 2009 through March 2010 imports rose 24 percent to 73.25 million tonnes. In February 2011, Coal Minister projected that 2010/2011 imports would jump 70 percent to 142 million tonnes. On a calendar year basis, according to India Coal Market Watch port data, Indias coal imports rose by 14 percent from 2009, to 86.28 million metric tons in 2010. Imports of coking coal, used in steel making, totalled 25.8 million tons and the rest was made up of thermal coal for electricity and heat, according to estimates. Overseas purchases of coking coal rose by 1.3 percent last year, while thermal coal imports increased by about 24 percent. Imports of the fuel may rise to more than 100 million tons in 2011 because India is adding about 4,000 megawatts of coal-fired capacity, it said. In September 2011 it was announced that the country could import approximately 114 million tonnes of coal in 2011/12, up by over a third from the 2010. Imports will come primarily from Indonesia and South Africa to help prevent power stations and factories in Asia's third-largest economy from slowing down. It was also reported that coal imports were up about 70 percent in the first six months of the year ending March 2012.

Indonesia shipped 28.27 Million tons of coal in June 2011, a 2.3 percent lesser than May export of about 28.962 million tons, Indonesian coal industry sources said. Indonesian coal producers have shipped approximately 8.236 million tons of coal to China in June, which was 0.24 percent higher than May 2011 exports. However, Indonesian producers failed to push more coal to India in June. Indian importers have imported 2.63 percent lesser coal compared to May Imports. India has imported only around 6.20 million tons, which were around 21.95 percent of Indonesian total coal exports in June. In the meantime, India has imported approximately 36.033 million tons coal, which was slightly lesser than Chinese's imports of 36.071 million tons, during first half this year. India was the largest Indonesian coal importer since January 2011 until April 2011, until China becomes the largest importer of Indonesian coal since May 2011.
Sources : India and Coal (www.sourcewatch.org/index.php?title=India_and_Coal) , India Imports 36.033 Million Tons Of Indonesian Coal Till June (22 July 2011) (http://leeuniversal.blogspot.com/2011/07/india-imports-36033-million-tons-of.html)

Reports on Coal :
According to a 2011 report by Mining Weekly - the Indian government has turned down a proposal from Coal India Limited (CIL) to lower its production target from 458-million tons to 440-million tons during 2011/12. CIL, the worlds largest coal miner, had sought government approval for a lower production target after the company recorded extraction of 150-million ton of coal during April 2011 to September 2011, which was 20-million ton lower than the pro rata target for the same period. However, the Indian government has refused official sanction for lower production fearing the crippling impact on thermal power generation, already suffering from acute shortage of coal supplies. The coal company has claimed that production had suffered during the last nine months because of heavy monsoon rains in the coal-mining geographies, said a Coal Ministry official. The Indian coal shortage has reached such a crisis stage that Prime

Minister was expected to convene a meeting of the Planning Commission and the Power, Coal and Finance Ministries, within the next fortnight to take stock and explore short- and medium-term solutions, the official said. Another article from The Economic Times (2011) said that - the Kolkata-based CIL, which mines most of its coal in states, such as Jharkhand, Orissa and West Bengal, was looking to lower the average age of its employees a relatively high 47. With up to 6,000
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people retiring every year, CIL reckoned a fresh intake of 1,000 to 1,500 every year would inject fresh blood and help lower the average age. The company - which briefly overtook RIL to become India's most valuable company before slipping back into fourth place - employs 3.7 lakh people. For the newcomers who had the misfortune to enter the job market a few months after the onset of the recession, a public sector company with lifetime job security seemed a safe bet. But two years later, many of the recruits have had enough and are ready to move on. Vikas Kumar who joined CIL in May 2009, but quit about four months ago, dreams of becoming a change agent dashed by the reality of a public-sector company. "I thought I could use my varied skills at CIL and get good exposure to labour law and HR practices. Our batch of 21 was recruited from IIM-Calcutta, IIM-Lucknow and XLRI campus. Only 4-5 are still with CIL. We felt demoralised right from the start. Apart from salary issues, we were underutilised and also faced hostility from seniors. We were promised a grade, one notch above engineers since we had work experience. We took up the matter with the company's top brass, yet nothing happened," he said. In all, Coal India, which picked up over 1,000 management trainees in the past few years, is facing an exodus among the newcomers. Some 30-40% of new recruits, particularly those from IITs and IIMs, have quit and more are likely to follow as the country's top coal producer grapples with an unprecedented HR crisis across its executive cadre due to limited growth options. A report from The Guardian (2011) mentioned that - the proposed coal plants in the south-eastern state of Andhra Pradesh are part of a wider Indian "coal rush" to bring power to the country's hundreds of millions living without electricity. The epicentre is Andhra Pradesh which, with a population is 84.7 million people, is now expanding its power production by 800%. Seven major and more than 30 smaller coal-powered power stations are planned, together intended to have a capacity of 56GW. In comparison, the UK's installed electricity capacity is 75GW, but is expected to rise to 100GW in the next two decades. The largest plant, expected to be opened in two years, will be the $4bn Krishnapatnam power station, India's first "ultra-mega" class of coal-fired power station. With 4GW, capacity it will be one of the world's 25 biggest electricity sources, capable of powering 7m middle-class homes.
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But, say activists, the Indian coal rush is being met by opposition, deaths and violent repression. Local protesters in Andhra Pradesh say that the power will mostly be exported to large cities, heavy industry and neighbouring states, while local people are left with a legacy of pollution and toxic dumps.
Sources : Das, Ajoy K. (2011), 'Indian government refuses to lower coal production target despite shortfall', Mining Weekly.com (24 October) (www.miningweekly.com/article/indian-governmentrefuses-to-lower-coal production-target-despite-shortfall-2011-10-24) , Muzumdar, Rakhi (2011), 'Management trainees from IIT, IIM quit Coal India', The Economic Times(18 October) (articles.economictimes.indiatimes.com/2011-10-18/news/30295579_1_iits-and-iims- new-recruitscil) , Vidal, John (2011), 'Andhra Pradesh at the forefront of Indian 'Coal rush' ', The Guardian (14 July) (www.guardian.co.uk/environment/2011/jul/14/india-coal-rush)

Future of Coal In India :

Faced with shortages of domestically produced coal, Indian coal producers are looking to buy stakes in overseas miners. Indias state-owned and private coal miners are looking at operations in the US, Canada, Russia, Australia, Indonesia, Kazakhstan and Mozambique. Indias electric power sector is the main consumer of coal nearly 70 percent of the countrys electricity is generated from over 80 coal-fired thermal plants. And with the Indian governments plans to provide electricity to all of its residents by 2012, the country will need an additional 68.5 gigawatts of baseload power generation capacity, and nearly all of that will be met with coal. Indias demand for coal is expected to nearly double over the next two decades, rising from 390 million tons in 2002 to some 760 Mt by 2030. By that date, only China's demand for coal is expected to exceed that of India's. The World Economic Outlook released by the International Monetary Fund confirms the likely continued high growth trajectory of Asia. Along with China, India is likely to be an important part of this economic growth. The International Energy Agency has consistently demonstrated Indias continued status of being a key consumer of fossil fuels, both now and in the future.

REFERENCES
1) Bharadwaj, Priyanka Tribune (28 May). (www.energytribune.com/articles.cfm/1838/Indias-Coal-Needs-Fuel-Overseas-Push) 2) Coal (http://www.indiacore.com/coal.html) 3) India Imports 36.033 Million Tons Of Indonesian Coal Till June (22 July 2011) (http://leeuniversal.blogspot.com/2011/07/india-imports-36033-million-tons-of.html) 4) Das, Ajoy K. (2011), 'Indian government refuses to lower coal production target despite shortfall', Mining Weekly.com (24 October). (www.miningweekly.com/article/indian-government-refuses-to-lower-coal production-target-despite-shortfall-2011-10-24) 5) India and Coal (www.sourcewatch.org/index.php?title=India_and_Coal) 6) Malhotra, T.C (2011), Indias future in coal, MetalMiner (9 August) (http://agmetalminer.com/2011/08/09/indias-future-in-coal/) 7) Muzumdar, Rakhi (2011), 'Management trainees from IIT, IIM quit Coal India', The Economic Times(18 October). (articles.economictimes.indiatimes.com/2011-10-18/news/30295579_1_iits-and-iimsnew-recruits-cil) 8) Vidal, John (2011), 'Andhra Pradesh at the forefront of Indian 'Coal rush', The Guardian (14 July). (www.guardian.co.uk/environment/2011/jul/14/india-coal-rush) (2009), 'India's Coal Needs Fuel Overseas Push', Energy