File No.22/Prospects of Dev. of Captive Coal Blocks 1 Prospects of Coal Block Development to meet the target

File No.22/Prospects of Dev. of Captive Coal Blocks

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Prospects of Coal Block Development to meet the target


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PREAMBLE


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• Coal Mines (Nationalisation) Act passed by the Parliament in 1973.

• As per this Act, Coal Mining could be done only by:

– a) Central Govt., or a company, or a Corporation owned, managed or controlled by Central Govt.

– b) A person to whom a sub-lease has been granted by any such Govt., Company or Corporation.

• In 1993 Act was amended and Coal Mining was opened to Companies engaged in :

– a) Production of Iron and Steel– b) Generation of Power– c) Washing of Coal obtained from a mine or– d) Such other End-use as the Central Govt. may, by notification, specify


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• Based on Sl. No. ‘d’ above, following End-uses added for Captive Mining from time to time.– (i) Cement Manufacture– (ii) Surface Coal Gasification– (iii) Underground Coal Gasification– (iv) Coal Liquefaction (CTL)

• Decision regarding Coal Washing being an approved End-use not implemented so far.

• As per the revised policy adopted in Dec’2001, State Govts. & Companies/Undertakings owned by them also authorised to do Coal Mining.


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CURRENT STATUS


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• Based on this policy dispensation, 216 Coal Blocks allotted to Public Sector and Private Sector companies and State Govt. Undertakings.

• This includes following 7 Blocks which were subsequently de-allocated as given below:


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Name of the Block Date of Allocation Date of De-allocation

Utkal ‘A 10.8.93 2.7.2003

Utkal ‘B1’ 2.2.96 1.8.2003

Takli Jena Bellora (N) 29.5.98 23.6.2003

West Umaria 24.5.2004 Sept’06

Panch bahini 6.9.05 Sept’06

Jai Nagar 2.8.06 2008

Kasta (E) 3.3.2005 May’09


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S No Name of the Company Block allocated Date of Allocation

Date of De-allocation

1 Binani Cement Ltd Datima 5.9.2008 27.4.2010

2 Murli Industries and grace Industries Lohara (East) 27.6.2008 17.5.2010

3 Maharastra State Mining Corpn Ltd Agarzari 25.7.2007 28.6.2010

4 Rashtriya Ispat Nigam Ltd Mahal 9.12.2005 7.3.2011

5 Rashtriya Ispat Nigam Ltd Tenughat Jhirki 10.9.2008 7.3.2011

6 Bhatia International Ltd Warora West(NR) 20.2.2007 30.5.2011

7 Andhra Pradesh Power Generation Corpn. LTd Ansettipalli 20.2.2007 30.5.2011

8 Andhra Pradesh Power Generation Corpn. LTd Punukula Chilaka 20.2.2007 30.5.2011

9 Andhra Pradesh Power Generation Corpn. LTd Pengedappa 29.5.2007 30.5.2011

10 Shree Baidyanath Ayurved Bhavan Pvt Ltd Bhandak (West) 27.11.2003 30.5.2011

11 National Thermal power Corpn Ltd Chhati-Bariatu 25.1.2006 14.6.2011

12 National Thermal power Corpn Ltd Kerandari 25.1.2006 14.6.2011

13 National Thermal power Corpn Ltd Chhati-Bariatu(S) 25.7.2007 14.6.2011

14 National Thermal power Corpn Ltd Brahmini 25.1.2006 14.6.2011

15 National Thermal power Corpn Ltd Chichru Pastimal 25.1.2006 14.6.2011

16 Jharkhand State Electricity Board Banhardih 2.8.2006 14.6.2011

17 Damodar Valley Corpn. Saharpur Jamarpani 25.7.2007 14.6.2011

An other 17 Blocks listed below have been deallocated 3 in 2010 and 14 in 2011.


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• Out of these, two have been reallocated.• As on 31.3.2011 No. of Blocks allocated stands at 194.• Total Geological Reserves in these 194 Blocks- 49306.8

mill tons.• Sector-wise distribution of these Blocks between Public

Sector & Private Sector as on 31.3.2011 given below:


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Summary of Allocation of Coal Blocks till 31.3.2011

Sector End Use Mode of Allotment

No of Blocks

Geological Reserves (MT)

Public Sector Undertaking

Power Govt. Dispensation

25 12981.9

Power Captive Dispensation

30 6672.9

Sub Total 55 19654.8

Commercial Mining

Govt. Dispensation

37 6635.86

Iron & Steel Govt. Dispensation

2 84.0

Iron & Steel Captive Dispensation

2 393.8

Sub total 4 477.8

PSU Total 96 26768.5


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Sector End Use Mode of Allotment

No of Blocks


Private Companies

Power Captive Dispensation

30 6645.5

Power Ultra Mega Power Project

7 2607.0

Sub Total 37 9252.5

Iron & Steel Captive Dispensation

64 9994.1

Cement Captive Dispensation

4 282.4

Small and Isolated Patch (Commercial Mining)

Captive Dispensation

2 93

Coal to Oil Captive Dispensation

2 3000.0

Pvt. Total 109 22538.3


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Sector End Use No of Blocks


All India Power 92 28907.3

Iron & Steel 68 10471.9

Cement 4 282.4

Commercial Mining

39 6645.2

Coal to Oil 2 3000.0

Grand Total 205 49306.8


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Allocation of Mining Blocks started in 1993 and yearwise details of allotment is as under:


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• 103 Blocks ie more than 50% of total Blocks allocated as on 31.3.2011 allocated in 2006 and 2007.

• Peak rated production capacity of mines to be opened in these Blocks assessed at approx. 700 mtpa

• Following schedule prescribed by Ministry of Coal for commencement of production from the allocated Blocks

Opencast Mines:• a) Blocks without Forest Cover- 36 months• b) Blocks with Forest Cover - 42 months


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Underground Mines :

a) Blocks without Forest Cover- 48 months

b) Blocks with Forest Cover - 54 months

• For Blocks not fully explored two years time allowed for completing Exploration

• As per this schedule more than 70 Blocks should have become operational by now.


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Power Iron &Steel Govt. Pvt Comm & Ceemnts Total

Year Target/AchNo.of Coal

Blocks

Production (MT)

No.of Coal

Blocks

Production (MT)

No.of Coal

Blocks

Production (MT)

No.of Coal

Blocks

Production (MT)

No.of Coal

Blocks

Production (MT)

2007-08

Target 17 14.43 7 8.70 2 0.50 2 0.30 28 22.48

2007-08

Achvmt 7 12.83 5 8.01 1 0.08 2 0.33 15 21.25

2008-09

Target 20 21.70 26 12.22 3 2.00 2 0.30 58 35.72

2008-09

Achvmt 14 21.24 8 8.39 1 0.14 2 0.24 25 30.01

2009-10

Target 30 24.90 39 19.04 6 2.85 2 0.30 77 47.09

Actual Production

36 MT approx

2010-11

Target 33 35.80 43 31.20 8 5.70 2 0.30 86 73.00

Actual Production

35 MT approx

2011-12

Target 42 54.28 43 41.30 8 8.20 2 0.30 95 104.08

Production targets fixed for the Captive Blocks in the current 5 year plan (11 th plan) is as under


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• Target achievement as high as 95% in 2007-2008 gone down gradually reaching about 47% and in 2010-2011.

• This level in the current year likely to be only about 35%• Counting from 97-98 for which the figures are available

the growth rate of production from captive mining Blocks -less than 2.5%


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ROAD BLOCKS

File No.22/Conference Sept 14-15//Presentation 3 (Captive Coal

Mining)

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1. Lack of Expertise- Procedural as well as Technical

2. Delay in Statutory Clearances particularly Forestry and Environmental

3. Land Acquisition4. Lack of Infrastructural Facilities5. Lack of Skilled Manpower6. Lack of Financial Capability7. Attitude of State Governments.


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• While all these factors have contributed to delay in commencement of operations main constraints have been Forestry clearance including that for Exploration, Land Acquisition and Lack of Infrastructure.

• These could be attended to as follows:

Clearances:Prospecting: a) Prospecting license to be issued together with Allocation Order.b) Forest department’s norm of one borehole per sq. km to be relaxed

subject to the project proponent giving an undertaking that no trees will be cut for exploration.


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Forestry Clearance:- Forest areas classified as ‘Go’ and ‘No-Go’ by MOEF

without any legal mandate- Forestry clearance being denied on untenable grounds

like:- Damage to forest cover because of mining will be long term. - This is not correct.• Since trees in the entire forest area are not cut at one go. This is done in

stages• Within 3-5 years of commencement of operations Land Reclamation

together with tree plantation starts and within 10-15 years, full grown replacement Forest is in place.

• Statistics show that Coal Industry plants on an average 3 to 3.5 trees for every tree that is cut.


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Bio diversity:- It is made out that Bio diversity gets destroyed- This is not correct since the forest area released for mining

is only a part of the total forest and the loss of diversity in the area where tree-felling is done gets made up in the regenerated forest through areas over which tree felling has not been done.

Sal Forest:- It is made out that Sal forest cannot be regenerated- This is not correct since successful Sal Plantation has been

done in mined out areas at certain mines.


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• Human beings as much a part of Environment as Forest & Wild life.• Not desireable that one is sacrificed for other.• Poverty any day a bigger pollutant than temporary loss of Forest.• Poverty can be ameliorated only by economic Growth. • This growth can be achieved only by ensuring adequate energy

availability. • Coal most important source of energy in our country.• Forestry clearance for coal mining should therefore become more of

a norm than exception • More stringent conditions can be imposed about regeneration of

forest and suitable monitoring mechanism could be set up to ensure compliance.

• Coal Industry may be asked to pay for the monitoring mechanisam


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Environmental Clearance:• Presently it is being granted mine-wise

• Instead the maximum pollution load that a Coalfield can carry should be assessed and clearance should be given for entire coalfield

• Meanwhile T.O. Rs could be standardised to save time

• State Govts. to be pro-active in organising Public Hearing


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3. Land Acquisition:a) Pressure on Land on account of populationb) Intense attachment to landc) Land-cost constitutes very small part of Capital

Investmentd) Problems in acquisition could be addressed to a large

extent by adopting the following:- Land to be taken on Lease/Lease rent to be fixed at least twice the annual income from land.- The mining company should reclaim the mined out area totally including rehandling of external OB

Dumps - Reclaimed land should be brought as close to the original as technically possible- Reclaimed land should be returned to the land owners- A lump-sum amount should be paid to the land owners for making the land fit for the usage to which

they want to put the land to- Thus loss of land will be temporary and this will eliminate the sense of deprivation that the land

owners feel arising out of permanent loss of land.


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Other actions :(i) Provision of employment(ii) Training facilities for making land losers employable(iii) Financing for generating self-employment opportunities

& creation of Infrastructural facilities for marketing of produce from such opportunities.


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4. Lack of Infrastructural Facilities:

• Captive Coal Blocks generally located in isolated areas.

• Even areas developed by Coal India were isolated.

• Coal India could do it since production volume from a Coalfield was large.


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• Construction of all facilities individually by each Block Allottee will make the mine unviable.

• All allottees in a particular coalfield should join hands and develop the facilities.

• Being tried for Talcher Coalfield in Orissa and Hasdeo Arand Coalfield in Chhatisgarh.

• Similar approach needed for other major coalfields like North Karanpura in Jharkhand, IB Valley in Orissa & Mand-Raigarh in Chhatisgarh..


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Steps for immediate improvement in production

• Operating mines should be allowed to produce in excess of the requirement for the concerned End-use plants.

• Excess coal to be handed over to Coal India at a price midway between the notified price and the ‘e’ auction realisation that Coal India will get by selling this coal.

• Amendment of Contract Labour (Regulation and Abolition) Act

• Block allottees should be mandated to extract the Block barrier jointly with the allottee of the adjacent Block


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• In large number of cases some sub optimal blocking has been done resulting in situations which militate against scientific mining. The Block allottees should be encouraged to operate such Blocks jointly as a single entity.


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THANKS

Documents

File No.22/Prospects of Dev. of Captive Coal Blocks 1 Prospects of Coal Block Development to meet the target