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|Coal in India & Coal India Limited||By A Special Correspondent|
Role of Coal in India
Coal is the most dominant energy source in India meeting 55% of India’s primary commercial energy needs. The world over it hovers around 27%. With India having just 0.8% of world’s known oil and natural gas resources but abundant coal reserves to the tune of 264.54 Billion Tonnes, coal plays a pivotal role in Indian Energy Scenario. The Proven coal reserves of 101.83 Billion Tonnes in India constitute 10% of World’s proved coal reserves. Integrated Energy Policy indicates that at the present rate of production the Indian coal reserves would last for over 80 years. India is the third largest hard coal producing country in the world after China and USA. India produced 704.469 Billion Units of power during 2007-08 of which coal based generation was 453.014 Billion Units aptly defining coal’s pervasive role in power generation of India. Coal continues to be mainstay of India’s energy needs for foreseeable future.
Coal India Limited – Business Profile
Coal India Limited (CIL) is a wholly owned Government of India Enterprise, under Ministry of Coal. CIL, with its headquarters in Kolkata, is an apex body with seven wholly owned coal producing subsidiary companies and one Consultancy Company with its activities spread across eight provincial states of India. The producing companies are Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), South Eastern Coalfields Limited (SECL), Western Coalfields Limited (WCL), Northern Coalfields Limited (NCL), and Mahanadi Coalfields Limited (MCL). The consultancy company is Central Mine Planning and Design Institute Limited (CMPDIL). North Eastern Coalfields (NEC) a small coal producing unit operating in Margherita, Assam is under direct operational control of CIL.
CIL operates through 473 mines of which 283 are underground, 155 opencast and 35 mixed mines. It also operates 19 Coal Beneficiation Plants. CIL mainly produces coking and non-coking coal. It encompasses the whole gamut of identification of coal reserves, detailed exploration followed by design/implementation and optimizing operations for coal extraction in its mines. Further, the broad functions of CIL include laying down policies, systems and procedures, formulating long-term and short-term plans and assisting subsidiary companies in achieving their objectives and monitoring them.
The Mission of Coal India Limited is to produce the planned quantity of coal efficiently and economically with due regard to safety, conservation and quality.
CIL - Fact File
Coal India Limited is the single largest hard coal producing company in the world. With manpower of 420 Thousand, it is also the largest corporate employer in the world. CIL alone contributes to 84% of India’s overall coal output. Meeting 46% of commercial energy requirement of India, it holds on to 75% of market share. It supplies coal to 72 thermal power stations, out of 75 of the country, sustaining a generating capacity of 64,285 MW. 78% of total coal produced by Coal India is catered to Power Utilities in India. A financially vibrant entity, CIL is one of the highest Tax and Dividend paying companies in India. In India, CIL offers coal at one-third of International prices.
CIL produced 379.46 Million Tonnes (MTs) of raw coal during the fiscal 2007-08. Coal off-take to consumers was the highest ever at 375.32 MTs in 2007-08.
A vibrant Financial Front
A financially vibrant entity, CIL grossed sales of US $ $ 9.69 Billion (Rs.388.66 Billion) during the fiscal 2007-08 and notched a profit before tax of US $ 2.18 Billion (Rs 87.38 Billion). Coal India’s Net Worth stands at US $ 4.82 Billion (Rs.193.42 Billion). Further, CIL paid US $ 1.09 Billion (Rs.43.00 Billion) to Government exchequer during fiscal 2007-08 by way of Corporate tax and Dividend Tax, over and above the highest ever dividend of US $ 425 Million (Rs.17.05 Billion). This is 27% of paid up equity of US $ 1.57 Billion (Rs.63.16 Billion). Further, by way of Royalty, Cess and Other Taxes CIL paid US $ 1.50 Billion (Rs.59.99 Billion) during the year.
As leader in the energy sector, CIL is expected to meet multi-dimensional challenges in the years to come. Current exercise indicates that the total coal demand of country is likely to reach a level of 731 MTs by 2011-12. Entrusted with the task of fuelling country’s energy needs, CIL is expected to produce about 520.50 by 2011-12. Looking further into the future perspective, CIL envisages reaching a production level of 664 MTs in 2016-17.
For this purpose, 122 coal projects for a capacity of about 295 Mty. have been identified to be taken up during XI Plan period. Of these 122 projects, 31 are underground (UG) projects and 91 opencast (OC). While the capacity of UG projects is about 21 MTs the same in case of OC projects is about 274 MTs.
About 97 projects (of the 122) are likely to contribute to the tune of 131 MTs during the terminal year of XI Plan. UG projects are expected to chip in about 6 MTs. with OC projects shouldering 125 MTs.
34 projects for a capacity of 95.37 mty have so far been approved and are in difference stages of implementation.
Strategic Plans/Joint Ventures Opportunities
Special Purpose Vehicle:
For acquiring coal resources abroad in Joint venture with four other state owned enterprises, CIL is a major stakeholder in a Special Purpose Vehicle (SPV) approved by Government of India. Set up with an authorised capital of US $ 2.49 Billion (Rs.100 Billion) the company has already started functioning as an un-incorporated joint venture out of its office based in New Delhi and is christened as ‘International Coal Ventures Limited (IVCL)’. The SPV is working to identify and acquire overseas coal properties.
Environmental restoration of land degraded due to coal mining activities is one of the prime concerns of CIL. Environmental Management Plans (EMPs) are an integral part of all coal mining projects.
Corporate Social Responsibility and R & R Policy:
As corporate citizen of India, CIL is conscious of its responsibility towards the well being of community in and around its coal mining areas. CIL seriously pursues Social Responsibility and recognizes it as core to taking its business forward. CIL comprehends that social obligation is much bigger than supporting worthy causes and in true essence impacts people and the quality of their lives through peoples involvement.
Coal India endeavours to uplift the social life and economic condition of people around mines and projects operated by coal companies. To meet the societal aspirations and needs of people CIL has a well structured Community Development Activity programme. CIL and its Subsidiaries have formulated appropriate guidelines for community development of villages in the periphery of coalfields. The policy includes development of infrastructure facilities, health, education, social/cultural activities, tree plantation and skill up gradation. It has also provision for institutional arrangements and for up-keep and maintenance of assets created.
CIL has adopted a modified Rehabilitation & Resettlement (R&R) policy in March 2008 in consonance with new national R&R policy. It will be more Project Affected People (PAP) friendly. CIL will be pursuing an inclusive model of growth by ensuring that PAPs are included in the decision making process underlining the need for wider contribution in R&R policies of communities affected due to mining. The aim is to pursue best practice Corporate Social Responsibility around the coal mining areas and improve the ‘Quality of Life’ with community consensus and active participation of people involved.
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