Metis Knowledge Series

Coal Mining in India 2012: Energising Captive Development

May 2012

Metis Knowledge Series

Coal Mining in India 2012: Energising Captive Development

With demand having risen multifold in the last five years, Indias share in the international coal consumers has become one of the largest. Domestic coal production has been a dampener against the rising demand and as a result many users have been on a coal asset buying spree globally.

The Planning Commissions suggestion to switch to a pooling price mechanism to average out domestic and imported price of coal has been opposed by coal ministry as it conflicts with the governments broader intension to move towards rationalization of fuel prices by integrating them with those

the idea of pooling of prices. In such state of affair the government has initiated workable solutions with switching over to more transparent and energy efficient gross calorific value (GCV) based coal grading system in line with the international norms. In addition to the above, the government has initiated stringent monitoring of captive coal blocks in order to increase domestic coal production. Government has also notified rules for allocation of coal blocks through competitive bidding process in order to bring transparency in allotment and to facilitate this process amendment in MMDR Act has also been vetted by the parliament. Around 50 coal blocks are proposed to be allotted through this route.
Status of Captive Coal Blocks

The demandCoal Production Outlook 2032 supply gap as estimated by to ion u ct T by the Planning 900 rod M al P 8 0 0 Co a ch 32 20 Commission in 800 re the ongoing 700 n tio 2 year is likely to 600 uc 0 3 od 2 P r T by l o f al e touch 142 500 Co 0 M le v ive 0 nt T pt h 4 re M million tonnes Ca re ac Cur .2 5 400 to rom 3 8 f (MT), with 300 domestic 200 availability of 100 only 554 MT 0 against the CIL SCCL Captive Others requirement of 2011- 12 (Estimated) 20016-17 (Optimistic) 2016-17 (Likely) 696 MT. This 2021-22 2026-27 2031-32 mismatch is likely to widen prevailing in the international year on year and expected to cross markets and doing away with 200 MT by the end of 12th plan (FY subsidies. The system is not 17). Coal production from domestic feasible since there are many sources is expected to reach 1275 variables to consider such as large MT by the end of 2031-32. Despite number of available sources of this rise, the country will still face import, receiving ports and dispatch an increasing demand supply gap. points as well as different qualities of coal, both imported and We are left with limited options to domestic, to a number of consumer curb this rising deficit either through destinations. increasing our reliance on buying expensive coal imports or Further, the recent policy issued by increasing domestic production Coal Ministry over surplus coal from through CIL and captive coal captive coal mines to Coal India blocks. Although many Indian firms Ltd. at a price not higher than the are scouting for acquisition of coal cost of production or CIL notified assets abroad to cater to their price is an inapt solution as the rising coal needs, but they have to policy does not provide incentive face various risks associated with for large players to enter mining, prices, policies and associated utilise world class technology and infrastructure. increase their mining capacities since the cost of production or CILMajority of the coal is utilised by the notified price would be highly power sector via linkages from CIL inadequate to encourage or captive blocks. Multiple investments in the sector. ambiguities exist in the entire value chain of coal block development in In this backdrop, it is important to terms of clearances, land take all possible measures in order acquisition, rehabilitation, etc. to increase the domestic output of Delayed development of blocks and coal rather than coming up with non-availability is the crucial factor restrictive policies like disallowing which undermines the feasibility of the open market sale of coal investment made in end-use produced from captive mines and sectors including power, steel, etc.

Total 218 Coal blocks have been allocated so far, out of which 23 blocks have been de-allocated by Ministry of Coal till December 2011.

Net Allocated Coal Blocks - 195

Production Started 29

Mining Lease 47

Land Acquisition 29

Purchase of GR 145

Forest Clearance 41

Peak Rated Capacity 9

EMP Clearance 74 Blocks to PSUs for commercial use 39 Mining Plan Approved 126

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Coal Mining in India 2012: Energising Captive Development

Major Concerns to boost Coal Blocks output

? Early clearances to coal blocks allocated to UMPPs ? Exemption of power sector companies from going through the auction

route for the allocation of coal blocks for captive use

? Government to hire consultant for coal block auction methodology ? State governments, independent power producers and NTPC to

expedite production from coal blocks ? platform for sale by CIL, sale of surplus from captive mines Creating and imports by all approved all-users ? formulate guidelines for forest clearance and block allocatees MoEF to to re-submit proposals to forest departments or MoEF. ? State Government to ensure granting of mining lease of captive coal blocks within 24 months from date of allocation ? Close monitoring with concerned state government at the level of MoC and Coal Controller to be initiated.

Of the total coal-based power plant capacity of 69,420 MW, almost 17,500MW projects are based on captive coal blocks.

Scope of Research Metis through its upcoming Research Compendium on Coal Mining in India 2012: Energising Captive Development has taken an initiative to address the prevailing woes of the coal sector and suggest multiple solutions which can be adopted in order to abate the industries black burners. The primary dimensions of the Research Compendium focuses on the ground realities of the industry supported by updated and statistical facts. The endeavour has been made in a view to highlight the captive aspect of the coal sector to strengthen the entire production potential encompassing whole sector. The said evolution will lead the sector to front, escaping the coal paucity & leaving marginal gaps for demand-supply mechanism thereby deducing the dependency on imports. Pertinently, the Research Compendium will magnify the trends in coal block allocation made so far addressing the major incompetencies of the spearheads in the sector. Furthermore, the details replenishes the exhaustive block-wise details along with recent status of associated EUPs, de-allocated blocks, list of tormented blocks, and illustrative designs showing vicinity of coalfields. In addition, the Research Compendium entails the recent shift to the new pricing regime, influence of the recent change in auction process and comparative analysis of different sourcing options, which will cater the desired solutions by the industry experts & professionals.

Comprehensive Data Points

? Exhaustive coverage of the blocks

allocated so far
? Latest Status of associated end-

What should be the key imperatives to tide away coal supply woes?

Will demand supply gap of domestic sector be mitigated by supportive increase in allocated coal blocks?

use plants
? List of de-allocated blocks with

respective comprehension ? of newly operational block Details ? Developments in lignite Recent blocks

What is the impact of new coal price mechanism?

What endeavours to be made by State Govt. to fast track the pending milestones?

Key Questions Answered

Why production from captive mines has not picked as expected? What should be the primary strategy to procure coal abroad?

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Metis Knowledge Series

Coal Mining in India 2012: Energising Captive Development

Draft Table of Content

Chapter - 1: Coal in India
? An Overview

- Indias Energy Mix - Inventory of Coal Reserves in India - Role of Lignite Mining ? A Historical Perspective - Landmarks Achieved in Coal Sector ? Analysis Industry - Production Trends - Consumption Pattern - Imports Trends - Washing and Blending Trends - Movement of Coal ? Surrendering to Peaking Demand 11th Supply Plan Conquest - Coal Demand - Coal Supply - Demand-Supply Gap Chapter 2: Industry Structure
? Introduction ? Evaluation of Industry Model

- Alliance Model - EPC Model ? Key Issues ? Mine Owners Perspective ? Perspective Lenders ? Mine Developers Perspective Chapter 5: Coal India Limited Backbone of Mining Sector
? Performance Physical

Coal, Power and Natural Gas Analysing Model Parallelism ? Key Players in Coal Sector Role of - Governing Bodies - Industry Participants ? Sector Mining Companies (CIL, Central SCCL, NLC) ? State Mining Corporations ? Mine Developers & EPC Companies Private ? Coal Traders - End Use Sectors ? Industrial Adaptability Gauging Chapter 3: Legislation, Policy Framework and Guidelines
? Regulatory Environment in India Historical ? Regulatory Structure Present

- Production trends - Expected Future Production - Technical Upgradation ? Allocation Modalities - Linkage/LOA - E-Auction ?& Challenges Issues - Stagnant Growth - Contractual Issues - Global coal Asset Acquisition by ICVL - CILs Coal for Long Term Off-Take (CLTO) Import Model - Ageing Support Infrastructure (Beneficiation and Washing) ? of Major Projects Snapshot Chapter 6: Captive Coal Blocks: Capturing Future Scarcity
? Introduction ? Identification of Coal Blocks ? Allocation of Coal Blocks ? Coal Mine Lifecycle Captive

- Acts - Policies - Other Governing Regimes - Eligibility & Procedures for Captive Mining ? Regulatory Reforms Chapter 4: Business Models
? Coal Mining Contract

Exploration and Evaluation Development of Coal Block ? Value-Chain in Captive Coal Block Development ? Major Milestones ? Time-lines Involved ? Coal Production Trend Captive ?and Challenges in Captive Coal Issues Development ? Analysing Cost Advantage for Captive Coal Chapter 7: Foreign Coal Acquisition
? Increasing Reliance on Coal Imports Need for

Joint Venture MDO Model

- Demand-Supply Imbalance - Quality Issues ?Coal Landscape Global - Coal Reserves - Global Production and Consumption Trend

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Coal Mining in India 2012: Energising Captive Development

Import and Export Trends Major Coal Importing and Exporting Countries ?Strategies Adopted by Key Nations Import ?Global Coal Asset Portfolio Indias - State/Central - Private ? Country-Wise Import Opportunity Assessment - Business Regulations and Policy Landscape - Infrastructure Availability - Pricing Trends - Funding Options - Associated Risks and Challenges ? Entry Option Modes - Strategic buyouts - JV/Partnership with Local Industries - Long-term Lease Option - Government partnerships/MoU ?Outlook Future - Special Focus: Impact on Economics of Coal Based Power Generation Chapter 8: Issues and Challenges Tough Road Ahead
? Coal Regulatory Authority Need of ? Allocation Guidelines

Chapter 9: Emerging Business Opportunities in the Value Chain

? EPC Companies in Mining, Washing ? Technology Providers ? Equipment Manufacturers ? Providers Logistics ? Associated Mine Infrastructure ? Consultants Technical

Chapter - 10: Recent developments in Coal Mining

? Bill MMDR ? Competitive Bidding of Coal Blocks ? New Coal Pricing Mechanism and its Impact on the

Coal Sector ? New Allocation Guidelines ? Environment Policy Changes ? of Pooling of Coal Prices Impact ? Increased Dependence on Imports ? Action of the Coal Ministry Plan of ? Emerging Technological Options- UG Mining ? up of Coal Sector Opening Chapter 11: Coal Demand Supply Outlook 2032
? for Coal by Various Sectors Demand ? Production by CIL/SCCL/Others ? Coal Imported ? Estimated Unmet Demand

- Surplus Coal Disposal - New Allocation Guidelines ? Risks Associated with Captive Mining ? Illegal Coal Mining ? Land Acquisition, Statutory Clearances ? Infrastructure and Exploration Issues ? Financing Issues ? Monitoring and Review Arrangements ? Simultaneous Coal Mining ? Challenges to be Addressed in 12th Plan Potential

Chapter 12: Metis Recommendations Key Statistics

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Coal Mining in India 2012: Energising Captive Development

List of Captive Coal Blocks & Lignite Block with Updated Status
Volume I-II
Status ? of Captive Coal & Lignite Blocks Status ?Of Allocated Coal Blocks Allocated Coal Blocks (195) De-Allocated Coal Blocks (23) Lignite Blocks Stand Allocated (28) Current ? Trend in Allocation - Year-Wise - State-Wise - Industry-Wise - Developer-Wise - Capacity-Wise - Eup-Wise - GradeWise - Current Status-Wise - Production-Wise - Mine-Type Wise Production Trend From Captive ? Coal Blocks - Present - Future (12th Plan) Kanta Basan Coal Block ? Kesla North Coal Block ? Madanpur (North) Coal Block ? Madanpur South Coal Block ? Morga ?II Coal Block Morga ?III Coal Block Morga ?IV Coal Block Morga-I ? Coal Block Nakia I ? Coal Block Nakia II ? Coal Block Parsa Coal Block ? Parsa East Coal Block ? Patoria ? Coal Block Pindrakhi ? Coal Block Puta Parogia Coal Block ? Rajgamar Dipside (Deavnara) ? Coal Block Rajgamar Dipside (South of ? Phulakdih Nala) Coal Block Sayang ? Coal Block Shankarpur Bhatgaon- II Coal ? Block Sondhia ? Coal Block Tara Coal Block ? Vijay Central Coal Block ? Jharkhand Amarkonda Murgadangal Coal ? Block Ashok Karkatta Central Coal ? Block Badam ? Coal Block Brahmadiha Open cast Coal ? Block Brinda ?Coal Block Bundu ? Burakhap small patch Coal Block ? Chakla ? Coal Block Chitarpur ? Coal Block Choritand Tailiaya Coal Block ? Dumri Coal Block ? Ganeshpur Coal Block ? Gomia ?Coal Block Gondulpara Coal Block ? Jitpur Coal Block ? Jogeshwar & Khas Jogeshwar ? Coal Block Kathautia ? Coal Block Kerandari BC Coal Block ? Kotre -Basantpur Coal Block ? Lalgarh ? (North) Coal Block Latehar ? Coal Block Lohari Coal Block ? Macherkunda Coal Block ? Mahuagarhi Coal Block ? Mednirai ? Coal Block Meral Coal Block ? Moitra Coal Block ? Mourya ? Coal Block North Dhadu Coal Block ? Pachmo ? Coal Block Agarzari ? Coal Block Anesettipali Coal Block ? Banhardih Coal Block ? Bhandak ? West Coal Block Brahmini ? Coal Block Chatti Bariatu Coal Block ? Chhati ?Bariatu South Coal Block Chichro ? Patsimal Coal Block Datima ? Coal Block East of ? Damagoria Coal Block Jainagar ? Coal Block Kasta (East) Coal Block ? Kerandari Coal Block ? Lohara ? (East) Coal Block Mahal Coal Block ? Panchbahani Coal Block ? Pengadappa Khammam Coal ? Block Punukula-Chilaka Coal Block ? Saharpur ? Jamarpani Coal Block Takli Jena Bellora (North) Coal ? Block Tenughat ? Jhikri Coal Block Warora ? (West) North Coal Block West of ? Umaria Coal Block Pachwara Central Coal Block ? Pachwara North Coal Block ? Pakri-Barwadih Coal Block ? Parbatpur-Central Coal Block ? Patal East Coal Block ? Patratu ? Coal Block Pindra-Debipur-Khaowatand Coal ? Block Rabodih ? OCP Coal Block Rajbar ?E&D Coal Block Rajhara ? North (Central & Eastern) Coal Block Rauta Closed Mine Coal Block ? Rohne ?Coal Block Saria Koiyatand Coal Block ? Sasai Coal Block ? Seregarha Coal Block ? Sitanala ? Coal Block Sugia Closed mine Coal Block ? Talaipali ? Coal Block Tasra Coal Block ? Tokisud ? North Coal Block Tubed Coal Block ? Urma Paharitora Coal Block ? List of Deallocated Coal Blocks:

Volume-I
Andhra Pradesh
? Tadicherla-I Coal Block

Arunachal Pradesh
? Namphuk Coal Block Namchi

Chhattisgarh
? Bhaskarpara Coal Block ?Coal Block Chotia ? DurgapurII/ Sarya Coal Block ? DurgapurII/ Taraimar Coal Block ? Coal Block Fatehpur ? East Coal Block Fatehpur ? Gare Palma IV/6 Coal Block ? Gare Palma IV/8 Coal Block ? Gare Pelma Sector II Coal Block ? Gare Pelma Sector III Coal Block ? Gare Pelma, Sector-I Coal Block ? Gare-Palma-IV/1 Coal Block ? Gare-Palma-IV/2 Coal Block ? Gare-Palma-IV/3 Coal Block ? Gare-Palma-IV/4 Coal Block ? Gare-Palma-IV/5 Coal Block ? Gare-Palma-IV/7 Coal Block ? Coal Block Gidhmuri

Volume-II
Madhya Pradesh Amelia ? Coal Block Amelia ? (North) Coal Block Bicharpur Coal Block ? Bikram ? Coal Block

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Metis Knowledge Series

Coal Mining in India 2012: Energising Captive Development

List of Captive Coal Blocks & Lignite Block with Updated Status
Brahampuri Coal Block ? Chhatrasal Coal Block ? Dongeri ? Tal-II Coal Block Gotitoria ? (East) Coal Block Gotitoria ? (West) Coal Block Mahan ? Coal Block Mandla ? North Coal Block Mandla ? South Coal Block Mara II ? Mahan Coal Block Marki Barka Coal Block ? Moher ?Coal Block Moher-Amlori Extn Coal Block ? Ravanwara Noth Coal Block ? Sahapur ? East Coal Block Sahapur ? West Coal Block Semaria/Piparia Coal Block ? Sial Ghoghri Coal Block ? Suliyari ? Coal Block Tandsi-III ? & Tandsi -III (Extn.) Coal Block Thesgora-B/ Rudrapuri Coal ? Block Urtan North Coal Block ? Maharashtra Bander ? Coal Block Baranj ?- I Coal Block Baranj ?- II Coal Block Baranj ?- III Coal Block Baranj ?- IV Coal Block Belgaon ? Coal Block Bhivkund ? Coal Block Chinora ? Coal Block Dahegaon/ Makardhokra IV Coal ? Block Gondkhari Coal Block ? Khappa ? & Extn. Coal Block Kiloni Coal Block ? Kosar Dongergaon Coal Block ? Lohara ? West Extn. Coal Block Majra Coal Block ? Manora ? Deep Coal Block Marki Mangli-I Coal Block ? Marki Mangli-II Coal Block ? Marki Mangli-III Coal Block ? Marki Mangli-IV Coal Block ? Marki-Zari-Jamani-Adkoli Coal ? Block Nerad Malegaon Coal Block ? Warora ? Coal Block Warora ? (West) Southern Part Coal Block Orissa Baitarni ? West Coal Block Bankhui ? Coal Block Bijahan ? Coal Block Chendi-II ? Coal Block Chendipada Coal Block ? Dip side ? of Meenakshi Coal Block Dip Side ? of Rampia Coal Block Dipside ? Manoharpur Coal Block Dulanga ? Coal Block Jamkhani Coal Block ? Machhakata Coal Block ? Mahanadi Coal Block ? Mandakini Coal Block ? Mandakini B Coal Block ? Manoharpur Coal Block ? Meenakshi Coal Block ? Meenakshi B Coal Block ? Naini Coal Block ? North of ? Arkhapal Srirampur Coal Block Nuagaon ? Telisahi Coal Block Patrapara Coal Block ? Radhikapur (East) Coal Block ? Radhikapur (West) Coal Block ? Ramchandi Promotion Block Coal ? Block Rampia ? Coal Block Talabira ? II Coal Block Talabira-I ? Coal Block Utkal B ? 1 Coal Block Utkal-A ? Coal Block Utkal-B2 ? Coal Block Utkal-C ? Coal Block Utkal-D ? Coal Block Utkal-E ? Coal Block West Bengal Andal East Coal Block ? Ardhagram Coal Block ? Barjora ? Coal Block Barjora ? (North) Coal Block Biharinath Coal Block ? Gangaramchak Coal Block ? Gangaramchak-Bhadulia Coal ? Block Gourangdih ABC Coal Block ? Ichhapur ? Coal Block Jaganathpur A Coal Block ? Jaganathpur B Coal Block ? Kagra Joydev Coal Block ? Kulti Coal Block ? Moira-Madhujore Coal Block ? Sarshatolli Coal Block ? Sitarampur Coal Block ? Tara (East) Coal Block ? Tara (West) Coal Block ? Trans Damodar ?

Lignite Blocks
Rajasthan Giral Lignite Block ? Gurha East & West Lignite Block ? Indawar ? Lignite Block Jalipa Lignite Block ? Kaprion ? Ki Dhani Lignite Block Kapurdih ? Lignite Coal Block Kasnau-Igiya & Matasukh Lignite ? Block Lunsara ? Lignite Block Merta Road Lignite Block ? Mokhala ? Lignite Block Mondal ? Charan Lignite Block Nimbri ?Chandarbadan Lignite Block Sacha ?Sauda Lignite Block Shivkar ? Kurla Lignite Block Soneri ?Lignite Block Gujarat Akrimota ? Lignite Block Khadsaliya Lignite Mine Lignite ? Block Khadsaliya-II & Surkha-III Lignite ? Block Mata Na ? Modh Rajpardi G-19 Exn Rajpardi Tadkeswar Panandharo Lignite Block Mongrol ? Valiya Lignite Block Vastan ? Lignite Block

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Coal Mining in India 2012: Energising Captive Development

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Release Date May, 2012