Of the 293.5 billion tonnes of Indian coal resources, about 118.1 billion tonnes fall under the proved or confirmed category. This constitutes about five per cent of the world’s proved coal resources. Rajesh Nath and Ajmal Fawad provide a bird’s eye view of the coal sector.

Coal is the most abundant fossil fuel resource in the country. India currently, stands fifth in terms of total world coal resources, whereas it is third from the point of view of identified reserves. The coal occurrences in India are mainly distributed along the present day river valleys i.e, Damodar Valley, Sone-Mahanadi Valley, Pench-Kanhan Valley, Wardha-Godavari Valley, etc. There are 69 major coalfields located in the peninsular India besides 17 located in the north-eastern region. The bulk of the coal reserves are confined to the south-eastern quadrant of the country. in West Bengal, Jharkand, Orissa, Chattisgarh and Madhya Pradesh.

The coal reserves of India have been estimated by the Geological Survey of India at 293.5 billion tonnes, up to the depth of 1200m, as on 31.04.2012. Out of 293.5 billion tonnes (Bt) of coal reserves, prime coking coal are 5.3 Bt, medium and semi-coking coals are 28.4 Bt and non-coking coals, 258.3 Bt. Most of these resources occur in the Gondwanas and the balance in the tertiary formations.

Currently, lignite reserves in the country have been estimated at around 42 Bt, most of which, occur in Tamil Nadu. Other states where lignite deposits have been located are Rajasthan, Gujarat, Kerala, Jammu and Kashmir and Union Territory of Pondicherry. Basically, Indian coals have high mineral matter (ash) content unlike the Pennsylvanian and carboniferous coals of America and Europe respectively.

Coal resources

India ranks third amongst the coal-producing countries of the world in terms of annual coal production. However, in respect of coal resources, it is endowed with less than one per cent of world coal resources. Of the 293.5 Bt of Indian coal resources up to a depth of 1200 m, about 118.1 Bt fall under the proved or confirmed category. This constitutes about five per cent of the world’s proved coal resources.

When India gained its independence in 1947, the coal production was nearly 30 million tonnes per year and the coal mining operation was primarily in the private sector. Till 1971-73, the coal mining operation remained primarily in the private sector and the production had come up to a level of nearly 72 million tonnes per year only. The entire coal industry in India was nationalised during 1972-73 and from then on, massive investments were made by the government of India in this basic infrastructure sector. India now ranks as the third largest coal producer of the world next only to China and USA.

Mining depths in Indian coalfields are quite shallow, barring a few mines in Jharia and Raniganj coalfields. Major share of coal resources lies at a depth of less than 300 m. About 87 per cent of coal resources lie within the depth range of 600 m. However, in most of the coalfields, exploration work beyond 600 m depth is yet to be taken up. It is expected that the resource figures will improve considerably, with increased depth of exploration.

Deposit characteristics vary widely from coalfield to coalfield. In some areas like the Jharia and Raniganj coalfields, high concentration of super imposed seams (as much as 40 in number) pose a great challenge to mining operations. The presence of a large number of thick seams, though a blessing for open cast mining, is again a major underground mining problem. Reserves in steeply inclined seams are, however, only marginal. Geological inconsistencies like faults, folds, washouts etc, common in most of the coalfields, tend to reduce the mining potential of deposits. Intrusions such as dykes and sills often lead to operational problems and quality deterioration.

Nearly all Indian coal seams are prone to spontaneous heating. The incubation period varies widely from 2 to 12 months. However, compared to gas emission in other parts of the world, the coal seams in India are less gassy. Due to the very nature of deposition, Indian coals, in general, are of inferior quality owing to high ash percentage, when compared with the coal available in the international trade arena. Despite this, Indian coal in general is better and more environment- friendly because of:

• Low sulphur content.
• Low chlorine content. Low toxic trace elements.
• Additional advantages for industrial use.
• High ash fusion temperature.
• Low iron content.
• Refractory nature of ash.

The exploration database, created so far, is adequate for the preparation of a long-term perspective plan for mining of coal in the country.

Coal deposits in India are confined to the eastern, southern and central parts of the country, consisting of 27 major coalfields. The shares of overall coal resources of the different states are:

• Andhra Pradesh: 7.55 per cent.
• Chhattisgarh: 17.32 per cent.
• Jharkhand: 27.38 per cent.
• Madhya Pradesh:8.31 per cent.
• Maharashtra: 3.78 per cent.
• Orissa: 24.34 per cent.
• Uttar Pradesh: 0.36 per cent.
• West Bengal: 10.43 per cent.

The balance share of coal reserves is distributed over Arunachal Pradesh, Assam, Meghalaya and Nagaland.

The quality- wise resource is 8.27 per cent coking coal and 91.73 per cent non- coking coal. Out of the total non-coking coal, the superior grades A, B and C with ash content 24 per cent or less; inferior grades with ash content between 24-45 per cent. Jharia Coalfield is the main source of prime coking coal. Superior grade non-coking coal is generally available in the Raniganj coalfield of West Bengal, the Central India coalfield of Madhya Pradesh and the Talcher coalfields of Orissa. The ash of Indian coal is of an inherent nature and has a high presence of near gravity material (NGM). This makes washing of Indian coal rather difficult. Some of the positive features of Indian coal are low sulphur, low toxic elements and the high ash fusion temperature.

Coal industry in India

Coal India is the largest public sector company, about 80.72 per cent of the total coal production in the country comes from the collieries of Coal India (CIL). It has eight subsidiaries: Bharat Coking Coal, Central Coalfields, Eastern Coalfields, Western Coalfields, South Eastern Coalfields, Northern Coalfields, Mahanadi Coalfields, Central Mine Planning & Design Institute. The Singareni Collieries is a coal-mining company jointly owned by the Government of Andhra Pradesh and Government of India. The Singareni coal reserves stretch across 350 km of the Pranahita Godavari valley of Andhra Pradesh, with a proven geological reserves aggregating to 9,567 million tonnes. SCCL is currently operating 15 opencast and 35 underground mines in Andhra Pradesh.

The Coal Mines (Nationalisation) Act, 1973 was amended w.e.f. June 9 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, which would be notified by the government from time to time. Under the last provision, cement production was further allowed as an end use w.e.f March 5 1996, for captive mining of coal. The restriction of captive mining does not apply to state-owned coal/mineral development undertakings like CIL, SCCL, Neyveli Lignite Corporation (NLC) etc. and Mineral Development Corporation of the state governments.

Coal production

Coal production achieved in the country during the year 2011-12 has been 539.94 million tonnes as compared to the production of 533.08 million tonnes achieved during the previous year i.e, 2010-11, showing a compounded annual growth rate of 1.4 per cent. About 80.72 per cent of the total coal production in the country comes from the collieries of Coal India. CIL is also the biggest supplier of coal in the country.

Coal production based on technology

In India, opencast and underground mining is mostly prevalent. Opencast mine production grew by 2.12 per cent to 488 MT in 2011-12. In the case of Underground (UG) mines, the production in 2011-12 is 51.96 MT.

Demand, production and supply

The demand of coal assessed by the Planning Commission during 2011-12 was 696 MT.

The target of coal production was 97.5 per cent achieved by CIL in 2011-12 and 102 per cent achieved by Singareni Collieries. The demand for power, steel and cement in a developing country is closely related to its economic growth. It is difficult to imagine a country slated for growth without using power, steel and cement. Global as well as Indian steel and cement production is dependent on coal, that is why distribution of coal of adequate quantity and quality to the power sector, followed by the steel and cement manufacturing sector, is considered a priority in the Indian coal industry.

Coal projects

The expansion programme undertaken by SCCL in brownfield underground projects are in the final stage and plans are afoot to implement a few greenfield projects as well.

Import and export

To bridge the demand-supply gap as well as to sweeten indigenous production, coal is imported from other countries, especially low-ash coal. As per our import policy 1993-94, coal has been put under Open General License (OGL) and therefore, importers are free to import coal based on their requirement. In 2011-12, Import of coal by India was 102.853 MT against the import of 68.918 MT registered in 2010-11. It is observed that the share of coking coal in the total quantity was 30.92 per cent which in value terms accounted for 53.87 per cent. Indonesia, with 53.73 per cent share, has remained the leading supplier, followed by Australia with 27.02 per cent, and South Africa with 11.88 per cent. These three countries together accounted for 92.63 per cent of the total import to India in 2011-12. In 2011-12, the total export was 2.032 MT. Here, Bangladesh accounted for 59.81 per cent of export followed by Nepal (33.58 per cent) and Bhutan (5.56 per cent).

Investment opportunities

Public sector undertakings have been in total command of the coal production since 1973-74 to the present day but with the liberalisation of economy since June 1991, the scenario has changed. Huge investments are required to meet the increasing demand of coal for power and other industries and at the same time, the government is looking for private players to invest.

Under the present policy of free market economy, the government is removing controls on industry and trade, reducing the tariff on import and allowing private investment in companies even up to majority share holding by private / foreign sources. The Coal Mines (Nationalisation) Act, 1973, has been amended to allow private participation in coal mining as captive mines for companies engaged in opening new units for power generation, coal preparation (washing) and production of iron & steel and cement. The government has already appointed a Screening Committee under the Ministry of Coal to allocate identified coal blocks for captive mining to above categories. Already a hundred blocks have been identified and several companies given permission to operate them.

Investment opportunities:

• in transfer of new technology;
• in manufacture of equipment / spares;
• in construction of road (both approach and arterial) in coalfields;
• in building rail lines;
• in major repair workshops / spares depots;
• in environmental protection;
• in joint venture for opening new mines;
• for leasing of equipment;
• in ancillary and infrastructure development;
• in auxiliary industries in development of ports and for handling imported coal.

Areas of interest

• Powered support longwall / shortwall.
• Continuous miners in room and pillar system.
• Roof bolting systems – application of light bolting machines in bord and pillar development galleries.
• Mechanised depillaring of coal seams developed on board and pillar system.
• Prediction of strata behaviour in extraction of developed pillars by caving method.
• Design of roof support to permit mechanised depillaring.
• Use of road haul dumper, continuous miner.
• Application of mobile powered supports (crawler- mounted) in depillaring by caving method.
• Road headers – coal conveyor systems.
• Simple and cost effective men and material transport system in inclined roadways . Ventilation system in mines.
• Coal handling arrangements – high speed loading equipment.
• Advanced geological exploration techniques to prove faults with small throw (less than 5 m); in depth range of 20 to 300 m.
• Communication system in underground mines.
• Application of information technology in mining activities.
• Simple method of beneficiation of coal – upgradation of coal needed for power plants.
• Improved hydraulic stowing techniques using river sand, crushed overburden, fly ash and other locally available materials.

New coal projects

• Lanco Infratech’s EPC division has bagged an order for lignite based power project at Surat, in Gujarat.
• Neyveli Lignite Corporation (NLC) intends to take the total power generation to 11,195 MW by the end of the next Five- Year- Plan.
• Mahanadi Coalfields is planning to set up a coal washery at Talcher in Orissa. Sahara India Power Corporation (SIPCL), has invited bids for coal-based power unit at Titlagarh in Bolangir district of Orissa.
• Parsa Kente Collieries plans to set up a coal washery unit in Sarguja.
• Mahanadi Coalfields is planning to expand the capacity of the Hingula-II Opencast mine to 15 million tpa.
• West Bengal Mineral Devp. & Trdg. Corpn. plans to set up UG coal mine project at Ichhapur.

Rajesh Nath is Managing Director VDMA India. Ajmal Fawad is Business Analyst, VDMA India.