India’s coal mining has a long history starting from 1774 when Sumner and Heatly of the East India Company began mining the Raniganj coalfield along the western bank of river Damodar. India’s large coal reserves have been its main source of energy since then.
In 1853, with the introduction of the steam locomotive, Indian coal mining received a boost after poor exploitation for about a century. With heightened demand, coal production increased rapidly within a short span—from 6.12 million tonnes (mts) per year in 1900 to 18 mts per year by 1920. After the First World War, production reached 29 mts in 1942 and 30 mts in 1946 (Ministry of Coal, 2017a). India’s independence led to a further rise in production. The National Coal Development Corporation (NCDC) was established in 1956 with the felt need of scientific and systematic coal mining.
The oil price shock in early 70’s and the growing realisation that the coal sector was not going to be successful in hands of private stakeholders led to it being nationalised. Undertaken in phases, Coking Coal Mines (Emergency Provisions) Act, 1971, Coking Coal Mines (Nationalisation) Act, 1972, Coal Mines (Taking over of Management) Act, 1973 and Coal Mines (Nationalisation) Act, 1973, were implemented.
Subsequently, Coal India Limited (CIL) was established in 1975 to manage coal mines. Nationalisation was done with a view
- to halt wasteful, selective and slaughter mining and put in place planned development of available coal resources;
- to improve safety standards;
- to ensure adequate investment for optimal utilisation consistent with growth needs; and,
- to improve the quality of life of the work force (Coal India Limited, 2017a).
India now ranks as the third largest coal producing country in the world after China and USA. It has been estimated that the country has 301.56 billion tonnes of coal and currently it meets about 55 per cent of India’s primary commercial energy needs (Ministry of Coal, 2017b). About 75 per cent of power generation is coal based in India. As of 2015-16, the country has been producing about 639 mts of coal per year (Coal Controller’s Organisation, 2016; Ministry of Coal, 2017b and 2017c).
Odisha leads in the production of coal, followed by Chhattisgarh, Jharkhand, Madhya Pradesh, Telangana, Maharashtra and West Bengal (Fig. 1).
In India coal is broadly classified into two types—coking and non-coking. Coking coal is primarily used in steel and metallurgical industries whereas non-coking coal is used for power generation.
There are further divisions which include—semi-coking coal, mainly used as blendable coal in steel making, merchant coke manufacturing and other metallurgical industries. Washed coking coal is used in manufacturing of hard coke for steel making and washed non-coking coal is used mainly for power generation. Middling and rejects are used in boilers for power generation, road repairs, briquette making, land filling, brick manufacturing units and cement plants (Coal Controller’s Organisation, 2016).
Categorised or graded based on type, ash content, moisture content, useful heat value (UHV) and gross calorific value (GCV), India’s coal has a deep inventory. Coking coal is graded on the basis of ash content (Fig. 2), while semi-coking coal is graded based on ash and moisture content (Fig. 3), and non-coking coal is graded based on three parameters—UHV, ash and moisture content and GCV (Table 1).
Coal production in the country is dominated by non-coking coal as coking coal reserves in the country are limited. High production of non-coking coal is also due to demand from the power sector. Though India is doing exceptionally in coal production to fulfil the energy demands of the country, quality of coal has always remained a matter of concern, especially for power sector as India’s coal has a high ash and low calorific content (Chikkatur, 2008).
Recent government interventions
and CIL initiatives
PAT (Perform, Achieve and Trade), a target setting methodology for power sector in India under the National Mission on Enhanced Energy Efficiency (NMEEE), 2008 is a major initiative taken by the Indian government that raised the demand for good quality coal. It is a regulatory mechanism that enforces energy intensive industries to reduce specific energy consumption. This is enabled through market based mechanisms to enhance the cost effectiveness through certification of saving the excess energy that can be traded (Bureau of Energy Efficiency, 2017a).
PAT Cycle-I (2012-13 to 2014-15) was introduced to reduce the energy consumption from eight energy intensive sectors—aluminium, cement, chlor-alkali, fertiliser, iron and steel, paper and pulp, thermal power plant and textile. Currently, there are 737 designated consumers (DCs) from PAT Cycle I, PAT Cycle II (2016-17 to 2018-19) and PAT Cycle III (2017-18 to 2019-20) participating under the scheme. This has further raised the demand for good quality coal from coal based industries (Bureau of Energy Efficiency, 2017b).
Disputes regarding low grade supply have been an integral part of India’s coal scenario that often led, especially the power sector users such as National Thermal Power Corporation (NTPC), to question the effective quality.
To remove such taints CIL has taken various steps. In 2012, CIL took a major initiative to change the grading system from the earlier UHV based grading to the gross GCV grading to provide value for money to the consumers. Also, in the same year, CIL decided to open 20 coal washeries to provide washed coal to the industry (Press Information Bureau, 2012a).
Presently, CIL has taken up installation of 15 coal washeries based on build, operate and maintain scheme (Venugopal, Patel and Bhar, 2016). Selective mining by introduction of the Surface Miner in opencast mine and Continuous Miner in underground mine are another major step taken by CIL (Press Information Bureau, 2016b).
In 2015, the Indian government intervened between NTPC and CIL after a standoff between them over the supply of low grade coal— with the introduction of a third party mechanism to check the quality of coal. In January 2016, a new system for sampling and testing of the dry fuel has been adopted to ensure supply of quality coal to consumers. Now, a set of standard operating procedures (SoP) are also adopted by the CIL for third party sampling (TPS) at loading ends. In fact the Central Institute for Mining and Fuel Research (CIMFR) has been appointed as the independent TPS agency for both the power plants and the coal companies. It was decided that all coal will be crushed to requisite levels before transportation except for pit head plant that does not require such crushing. CIL has been providing 100 mm crushed coal to power plants since January 2016 (Coal India Limited, 2017b and 2017c).
Another recent initiative includes the control of grading of coal by the Coal Controller’s Organisation (CCO). It has started the grading and notifying the mines of Coal India Ltd from April 2017. It is a significant change from the present practice of internal grading by Coal India. This could lead to a major change in the existing grades given to the mines. Earlier, this grading was being done by the coal producing subsidiaries of CIL only.
Though coal quality has always been the major concern because of high ash and moisture content, there are other problems that affect coal mining in India. For growing industries such as steel, coking coal is very scarce. Outdated mining technologies, especially in state owned plants, lead to inefficiency in power generation and non-optimum use of coal (insightsonindia.com, 2015) Mining of coal is also facing issues of environmental clearance and tribal resistance. Another major issue that has recently come to light is the downgrading of 177 mines out of 413 mines of Coal India Limited by CCO on the basis of quality concerns (Kanungo, 2017). Though it will benefit the power producer in terms of cost of coal, it will burden CIL with the need to enhance production of good quality coal.
The government has recently announced the commercialisation of coal mining after 44 years of nationalisation (Dutta, 2017). Four identified blocks will be up for bidding for commercial mining. Earlier the private sector was allowed to mine coal for its own use—now it will be allowed to sell to others as well. Though privatisation is being seen as a challenge for CIL as it will have to turn very efficient to up the game, the move will help in enhancing domestic production. However, coal being opened for profit making may lead to increase in price of coal and electricity. The answer whether privatisation will lead to growth or to the era prior to nationalisation is yet to be revealed.
Though through coal India has been fulfilling energy demands, dependency on such non-renewable source in coming decades is matter of concern. Improving coal production and its quality is not going to help for long. It is time to see the future of energy in India through renewable energy sources such as solar and nuclear energy.