PRESENTED BY: ANOOP MISHRA (KIIT School of Rural Management)

Coal Industry in Present Scenario in India and Coal Scam

Introduction of Coal Industry in India

Coal contributes over half of Indias primary commercial energy. Coal is likely to remain Indias 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
Prime Coking Medium Coking Semi Coking

Proved
4614 12573 482

Indicated
699 12001 1003

Inferred
0 1880 222

Total
5313 26454 1707

Non Coking
Tertiary Coal

95739
594

123668
99

31488
799

250895
1493

Total

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 as an end use w.e.f 5th March 1996 for captive mining of coal.

 The shares of overall coal resources of different States are:

Overall Coal Resources of different States

4% 2%
9% 13% 13% 17% 7% 18% 17% Chhattisgarh Orissa Jharkhand Bihar M.P. Andhra Pradesh Maharastra West Bangal U.P.

COAL HUBS

Coal Industry in India

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.

FDI in Mining sector:

Year (April to March) 2008-09 2009-10 2010-11 2011-12 Grand total FDI in Rs. Crore 161.09 829.92 357.42 436.61 1,785.04 FDI in Euro million 24.78 127.68 54.98 67.17 274.62

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

Environmental and social issues

Human, labor and technology issues

Coal Blocks Allocation Scam

The Comptroller and Auditor General (CAG) of India in its incisive audit report noted that Indias 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 as he 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 were some of the major beneficiaries of the coal blocks distribution.

 The government has distributed about 150 coal blocks over the past eight years. During this period Prime Minister Manmohan Singh. The 1.86 lakh rupees scam is the biggest in the history of India as it surpassed the 1.7 lakh crore 2G spectrum scam. The most important assertion of the CAG Draft Report is that the Government had the legal authority to auction the coal, but chose not to do so. Congress MP, Naveen Jindal's Jindal Steel and Power got a coal field in Feb 2009 with reserves of 1500 million metric tones while the government-run Navratna Coal India Ltd was refused. On 15 Sep 2012, an Inter Ministerial Group (IMG) headed by Zohra Chatterji (Add. Sec. in Coal Ministry) recommended cancellation of a block allotted to JSW (Jindal Steel Works), a Jindal Group company.

Bibliography
Coal Directory of India Government of India-Ministry of Coal Annual Report Report on Overview of Coal Mining sector in IndiaVDMA Information from SCCL & CIL website www.vdmaindia.org http://seminarprojects.com/Thread-coal-allocation-scam-or-coalgate-ppt#ixzz2WjlkT5rG