Introduction of Coal Industry in India Coal contributes over half of India’s primary commercial energy. Coal is likely to remain India’s most important source of energy for the coming decade or two. However, the sector has been beset with controversies of late such as the ‘coal-gate’ scam related to allocation of captive coal blocks and insufficient coal production leading to questions about who should bear the increased costs of coal imports. India, currently, stands eighth in terms of total World Coal Resources, whereas it is fourth from the point of view of identified reserves. (Geological Survey of India at 285.8 billion tones in 2011) Bulk of the coal reserves are confined to the south-eastern quadrant of the country in West Bengal, Jharkhand, Orissa, Chhattisgarh & Madhya Pradesh.
COAL RESERVES IN INDIA AS ON 31.03.2011 (IN MT) Type of Coal Proved Indicated Inferred Total Prime Coking 4614 699 0 5313Medium Coking 12573 12001 1880 26454Semi Coking 482 1003 222 1707Non Coking 95739 123668 31488 250895Tertiary Coal 594 99 799 1493Total 114002 137471 34390 285862
India ranks third amongst the coal producing countries of the world in terms of annual coal production next only to China and USA. The Coal Mines (Nationalization) Act, 1973 was amended w.e.f.9th June 1993 to allow coal mining by both private and public sector for captive consumption for production of iron and steel, generation of power, washing of coal obtained from a mine and other end use. Under the last provision, cement production was further allowed asan end use w.e.f 5th March 1996 for captive mining of coal.
The shares of overall coal resources of different States are:18%17%17%13%13%9%7%4% 2%Overall Coal Resources of different States Chhattisgarh Orissa Jharkhand Bihar M.P. Andhra Pradesh Maharastra West Bangal U.P. Coal India is the largest public sector company, about 80.86% of the total coal production in the country comes from the collieries of Coal India Ltd (CIL).It has eight subsidiaries: Bharat Coking Coal Ltd., Central Coalfields Ltd., Eastern Coalfields Ltd., Western Coalfields Ltd, South Eastern Coalfields Ltd., Northern Coalfields Ltd., Mahanadi Coalfields Ltd., Central Mine Planning & Design Institute Ltd. The Singareni Collieries Company Limited (SCCL) is a coal-mining company jointly owned by the Government of Andhra Pradesh and Government of India. Coal Industry in India.
Year (April to March) FDI in Rs. Crore FDI in Euro million2008-09 161.09 24.782009-10 829.92 127.682010-11 357.42 54.982011-12 436.61 67.17Grand total 1,785.04 274.62FDI in Mining sector: Regulatory Framework of Coal Industry in India: Coal Industry in India is regulated largely by the provisions of: The Coal Mines (Nationalization) Act, 1973 To nationalize the coal sector Mines & Minerals (Development & Regulation) Act, 1957 To regulate exploration and exploitation of minerals The Coal Bearing Area (Acquisition & Development) Act To facilitate acquisition of coal bearing land Environmental Protection Act, 1986
Liberalization of Policy Regime: Captive mining by Power, Steel and Cement industry allowed. Foreign Direct Investment allowed up to 100% in Power and coal mining Creating a competitive market for sale of coal Progressive reduction of custom duty on Coal and HEMM imports Introduction of Contract Mining Human, labor and technology issues Environmental and social issues.
Coal Blocks Allocation Scam The Comptroller and Auditor General (CAG) of India in its incisive audit report noted that India’s exchequer suffered a massive loss of 1.86 lakh crore due to the distribution of coal blocks without bidding. The CAG report was tabled in the parliament on 17 August 2012. The CAG in its report stated that 57 coal blocks that were allocated to private companies during 2004-2009.
The CAG report has also brought Prime Minister Manmohan Singh under scrutiny ashe was holding the charge of Coal Ministry from 2006 to 2009.The CAG report also raised serious allegations against the PMO which delayed the fair bidding process for coal blocks despite the clearance from Law and Justice Ministry. Tata Group, Reliance Power, Jindal Power and Steel, Abhijit Group, Bhushan Group, Electro Steel, OP Jindal Group.