Coal is one of the most important natural resources that power the growth engine of the economy. While considering plans to harness energy, the vital constituent among all the options available to a country is coal.

Sep 15 2013 | Focus

Critical coal

Coal is one of the most important natural resources that power the growth engine of the economy. While considering plans to harness energy, the vital constituent among all the options available to a country is coal. It is found in almost all the countries. But the resources are depleting year after year. At this point of time, we have coal resources hat can last for another 112 years as per World Coal Association at current rate of production. Since 2000, global coal consumption has increased faster than other fuel. China, USA, India, Russia and Japan are the major users of coal in the world. Around 67% of global coal consumption is accounted by Asia. Sandeep Sharma takes a look at the coal sector in India…

Coal is widely used for power generation, steel & cement production, and to generate liquid fuel. The use of coal is not only limited to the above-mentioned sectors but also includes alumina refineries, paper production, chemicals, pharma units, soap, aspirin, solvents, dyes, plastics, fibres, rayon, nylon, water filtration. It is also used as light weight reinforcement material used in mountain bikes and tennis rackets. It produces silicones and silanes mainly used in producing water repellents, lubricants, cosmetics, hair shampoos, resins and toothpaste. Coal is the prime energy source available in India which also provides affordability to all industries concerned. The environment aspect
no doubt goes against wide usage of coal. Coal India Ltd (CIL) is the main coal producer and supplier in India. As the gap between coal production and demand is increasing, the import of coal and search for coal reserves abroad has become imminent. Clean coal is the need of the hour as development at the expense of the environment is no development. Using latest technology and equipment is the way forward to produce coal at a lower cost. Coal evacuation through railways also needs to be evaluated. Setting up power and steel plants near coal mines are recommended so as to save on transportation cost thereby reducing the production cost.

EXPLORATION
On the recommendation of the Inter Ministerial Committee (IMC) after due deliberations with the applicant State Government, Ministry of Power and Central Electricity Authority (CEA), 14 coal blocks were allocated by the Ministry of Coal for power sector. These 14 blocks have a geological reserve of 8,311 MT capable of yielding about 159 MT coal per annum. This would be sufficient enough to produce 31,800 MW power. Allocating these blocks lead to an investment of more than Rs.1, 60,000 crore in the power sector with consequential multiplier effect in other sectors of the economy. Around 15 states and 6 Central PSUs have been allocated coal blocks. Some of the coal blocks, because of their size had to be given to more than one State. Namely, Deocha-Pachami block in West Bengal having a reserve of 2102 MT has been given to six different state power PSUs. As on date 178 coal blocks stand allocated. Out of these, 35 coal blocks have gone into production.

CAPTIVE MINING & MONITORING
For captive mining, the Coal blocks are allocated to eligible public and private sector companies registered under the Indian Companies Act, 1956 for approved and specified end-use projects (EUPs) to be set up as well as existing ones viz. generation of power, production of iron & steel, production of cement, washing of coal obtained from a mine and production of syn-gas through coal gasification (underground and surface) and coal liquefication, in pursuance of Section 3 of the Coal Mines (Nationalisation) Act, 1973. The production from the coal blocks is expected to be synchronized with the commissioning of the end-use plants for which the block is allocated. Inter-Ministerial Group (IMG) monitors the progress of development of coal blocks as well as associated end use plants. Appropriate action is taken in case of unsatisfactory which also includes deallocation of the block.

COAL MINE METHANE (CMM) PROJECT
Coal India Ltd (CIL) / Central Mine Planning & Design Institute (CMPDI) are pursuing development of Coal Mine Methane (CMM) from its mining areas as it would be beneficial on mine safety as well as environment. A total of 33 Coal-Bed Methane (CBM) Blocks have been awarded in 4 rounds of CBM Bidding, out of which 3 blocks have been relinquished. 9.9 Trillion Cubic Feet (TCF) of CBM gas in-place has been established in 8 Blocks so far.

DEMAND
Demand for coal in India is increasing year after year. It is estimated that against availability of 614.55 MT of coal, the demand for coal is likely to touch 769.69 MT mark by 2013-14.

COAL DISPATCHES TO POWER SECTOR
During 2012-13, as against supply target of 342.31 Million Tonne, dispatches to power utility sector from Coal India Ltd (CIL) was at 343.79 Million Tonne, a growth of more than 10% over the previous year. For Thermal Power Plants (TPPs) commissioned prior to 31.03.2009, CIL has guaranteed 90% supply of Annual Contract Quantity (ACQ) and 80% of ACQ for TPPs commissioned after 31.3.2009. The supply of 343.79 Million Tonne to power utilities in the country in 2012-13 has been 91.5% of commitment under Fuel Supply Agreement (FSA)/ Memorandum of Understanding (MoU) of 375.82 Million Tonne. In current year, up to Jun’13, coal supply to power utility sector has been 86.39 MT which is 87.8% of commitment under FSA/MOU of 96.41 MT.

CHALLENGES
The main challenges with regard to meeting demand for coal are land acquisition issues, delay in getting environment & forest clearances, difficult geo mining conditions in some areas, resettlement and rehabilitation issues, coal evacuation through railways not happening in time due to capacity constraints. Seasonal factors such as excessive rain and heat wave conditions also constrain production.

IMPORTS FACILITATED
As per Government’s import policy, coal is placed under open general license (OGL) and can be freely imported by anyone on payment of applicable import duty as per their
requirement.

MODERNIZE COAL MINING OPERATIONS
Technology up gradation and modernization of CIL is high on the agenda. Coal India Ltd (CIL) has adopted modern technologies for coal mining. To further modernize mining operations proposals are invited International Consultancy Firms / Organizations. Fourteen International Consultancy Firms / Organizations having experience in consultancy services for coal mining activities responded and proposals are being examined.

REVIVAL OF ABANDONED UG MINES
The Coal India Ltd had identified 18 abandoned underground mines for reviving them economically. Tenders were floated to revive these units seeking joint venture partner. Inadequate response received.

R&D ACTIVITIES
With the aim to improve efficiency and efficacy of coal, R&D activities are initiated in the Coal and Lignite sectors. So far Central Mine Planning and Design Institute (CMPDI) has completed the following projects:

1. Resource assessment and characterization study of noncoking coal for sponge iron industry proved that the most of the Indian non coking coals including inferior grade are suitable for sponge iron making as such or after beneficiation.
2. Resource survey, characterization and blending studies of low volatile coal for their use in steel industry.
3. Effective utilization of low rank and low volatile high rank Indian coking coals for Blast Furnace (BF) coke making.
4. Coal-to-Liquid – One such project is now under implementation by Central Institute of Mining and Fuel Research (CIMFR) in which indigenously suitable catalysts will be developed under S&T fund of Ministry of Coal. Coal if converted to liquid could be used for automobile and other industries

CIL TO INVEST Rs 25,400 CRORE
CIL plans to invest Rs 25,400 Crore during XII- Plan Period (2012-17). An adhoc provision of Rs 25,000 Crore is made in addition to acquire coal assets abroad. Rs 10,000 Crore for development of coal blocks in Mozambique is proposed in XII Plan period. Coal India Ltd (CIL) plans to implement some of its mine/projects through the Mine Developer and Operator (MDO) route. Five opencast mines with an annual capacity of 14 MTY and two underground mines with an annual capacity of 2.52 MTY have been identified for implementation through MDO Route. Request for Quotation (RFQ) documents in respect of two OC mines, namely Itapara, ECL and Malachua, South Eastern Coalfields Limited (SECL) have been issued. Rajmahal Opencast Projects (OCP), Eastern Coalfields Ltd (ECL) and Bhubaneswari OCP, Mahanadi Coalfields Ltd (MCL) are already operating under MDO concept.

COAL STOCK AT TPPs
Depleting coal stock with power station was a major issue threatening lower power generation. In comparison with coal stock of 14.14 MT equivalents to 11 days’ requirement as on 01.04.2012; it has considerably increased to 22.02 MT equivalents to 18 days’ requirement as on 29.07.2013. As on 29.07.2013, 65 TPPs are carrying coal stock equivalent to more than 15 days’ requirement and as a result, quite a few power stations have started regulating coal supplies to avoid further build up of stock at their end.

COAL QUALITY IMPROVEMENT
The following measures are adopted by coal companies to improve the quality of coal.

• Selective Mining by Surface Miners and adopting Clean Coal Technology;
• Appropriate positioning of over burden and coal benches to avoid contamination;
• Scrapping / cleaning of coal benches before blasting;
• Installation of metal detectors/magnetic separators over conveyors before loading coal;
• High capacity coal handling plant to dispatch sized/ uniform quality of coal at major projects;
• Establishment of well equipped laboratories at projects for regular quality assessment;
• Shale picking at mine face, stocks and loading points/sidings for consistent quality;
• Installation of Auto Mechanical Samplers (AMS) at all silo loading points
• Joint sampling facility to consumers having annual requirement of 0.4 million tonne and above.

CIL TO SET UP 16 WASHERIES
To reduce the ash and other useless component from coal, CIL has decided to set up 16 washeries through its subsidiaries as given below:

Sl.

No.

Name of washery

Capacity (Mty)

Subsidiary

State

1

Kusmunda

10.0

SECL

Chattisgarh

2

Baroud

5.0

SECL

Chattisgarh

3

Madhuband

5.0

BCCL

Jharkhand

4

Patherdih

5.0

BCCL

Jharkhand

5

Patherdih

2.5

BCCL

Jharkhand

6

Dahibari

1.6

BCCL

Jharkhand

7

Dugda

2.5

BCCL

Jharkhand

8

Bhojudih

2.0

BCCL

West Bengal

9

Ashoka

10.0

CCL

Jharkhand

10

Konar

3.5

CCL

Jharkhand

11

Karo

2.5

CCL

Jharkhand

12

Chitra

2.5

ECL

Jharkhand

13

Basundhara

10.0

MCL

Orissa

14

Jagannath

10.0

MCL

Orissa

15

Hingula

10.0

MCL

Orissa

16

Ib-Valley

10.0

MCL

Orissa

Total

92.10

Source: PIB

COAL REGULATORY AUTHORITY

The Government of India is likely to set up Coal Regulatory Authority. The objectives and functions of the authority would be to specify by regulation
• Specify methods of testing for declaration of grades or quality of coal
• To monitor and enforce closure of mines as per approved mine project plan
• To ensure adherence of approved mining plans
• To specify the principles and methodology for determination of price of raw coal and washed coal or any other by-product generated during the process of washing
• To call for information, record or other documents from the entities and publish statistics and other data in relation to the coal industry
• To specify the standards of performance and norms of operational efficiency except in the area related to mines safety

The Authority will have the power to adjudicate upon disputes between the parties. The coal authority will also advise the Central Government in formulation of polices in coal sector, including allotment or earmarking of coal blocks for any purpose and promotion of competition, efficiency, economy and investment in coal industry.

COAL PRODUCTION BOUND TO RISE IN FUTURE
Coal India Ltd has produced 31.67 million tonne in the month of August, 2013 registering 11% growth over the corresponding period of the previous year. During the period April-August, 2013, the cumulative coal production has been 167.32 million tonne registering 3% growth over the corresponding period of the previous year. The off-take to the power sector stood at 25.9 million tonne in August 2013 from CIL. Similarly the cumulative off-take to the power sector during the period April-August 2013 is estimated at 140.6 million tonne from CIL. Coal resource inventory has reached to 299 million tonne. Coal companies are making all out effort to increase production to meet the growing demand from various sectors of the economy. At present, coal is vital for the overall growth as is critical for the existence of many a sectors such as power and steel.

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