CHAPTER-III

COAL COMPANIES

 

    1. The Coking Coal Mines ( Emergency Provisions ) Ordinance was promulgated by the Government of India on 16.10.1971 under which except the captive mines of TISCO and IISCO, the management of all coking coal mines was taken over by the Government. A new company called Bharat Coking Coal Limited was formed as a subsidiary company of Steel Authority of India Limited to manage the taken over mines. These mines were subsequently nationalised w.e.f. 1.5.1972. Later on the management of 711 coal mines was also taken over by the Government with effect from 31.1.1973 and they were nationalised w.e.f. 1.5.1973 and a new Government Company namely, Coal Mines Authority Limited ( CMAL ) with headquarters at Calcutta, was set up by the Government in May, 1973 to manage non-coking coal mines. The CMAL was organised as a unitary structure on divisional pattern with four Divisions, the Central Division, the Eastern Division, the Western Division and the CMPDIL. The mines of erstwhile National Coal Development Corporation were brought under the Central Division of the CMAL. In September, 1975 CIL was formed as a Holding Company with five subsidiaries namely Bharat Coking Coal Limited ( BCCL ), Central Coalfields Limited (CCL ), Eastern Coalfields Limited ( ECL ), Western Coalfields Limited

      ( WCL ) and Central Mine Planning and Design Institute Limited ( CMPDIL ).

    2. In view of the projected increase in production and investment contemplated for CCL and WCL group of coal mines and in view of their extensive geographical spread resulting in day to day administrative, technical and communication problems etc. two more coal companies, namely, Northern

      Coalfields Limited and South Eastern Coalfields Limited were formed w.e.f. 28.11.1985.

    3. Considering the prospects of Orissa Coalfields, being the growth centre for the VIII and IX Plan periods, a new coal company was formed bifurcating South Eastern Coalfields Limited (SECL). The new company Mahanadi Coalfields Limited was incorporated on 3rd April, 1992 with its headquarters at Sambalpur ( Orissa ) as fully owned subsidiary of Coal India Limited to manage the Talcher and IB-Valley Coalfields in Orissa.
    4. CIL have now 8 subsidiaries viz. Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Eastern Coalfields Limited (ECL), Western Coalfields Limited (WCL), South Eastern Coalfields Limited (SECL), Northern Coalfields Limited (NCL), Mahanadi Coalfields Limited (MCL) and Central Mine Planning and Design Institute Limited (CMPDIL). The CMPDIL is an engineering, design and exploration company set up for preparing perspective plan(s), rendering consultancy services and undertaking exploration and drilling work to establish coal reserves in the country and collection of detailed data for preparation of projects for actual mining. The other seven subsidiaries of CIL are coal producing companies.
    5. CIL and its subsidiaries are incorporated under the Companies Act, 1956 and are wholly owned by the Central Government. The coal mines in Assam and its neighbouring areas are controlled directly by CIL under the unit North Eastern Coalfields.
    6. In addition to CIL and its subsidiaries there is another coal company in Public Sector namely Singareni Collieries Company Limited (SCCL), which is a joint venture of Government of Andhra Pradesh and Government of India sharing SCCL's equity capital in the ratio of 51:49.

 

 

COAL INDIA LIMITED AND ITS SUBSIDIARIES

 

3.7 CIL the holding Company with headquarters at Calcutta, is headed by a Chairman-cum-Managing Director in schedule 'A' scale of pay who is assisted by three Functional Directors, namely Director (Technical ), Director ( Personnel & Industrial Relations ) and Director ( Finance ) who are all in Schedule 'B' scale of pay. Each Subsidiary Company has its own Board of Directors headed by a Chairman-cum-Managing Director in schedule 'B' scale of pay. In addition, there are four functional Directors ( in schedule 'C' scale of pay ) in each of the six production companies of BCCL, ECL, CCL, NCL, SECL and WCL viz. Director(Personnel), Director(Finance), Director(Planning and Projects) and Director (Technical). In MCL there are at present three posts of functional Directors, namely Director (Technical), Director (Personnel) and Director (Finance). CMPDIL also has four functional Directors on its Board of Directors who are designated as Director (Technical), Director (Coal Production & Utilisation), Director (Planning & Design) and Director (Research, Development & Technology). In addition, there are several part-time or nominee Directors on the Board of CIL and its subsidiaries who are appointed in accordance with the Articles of Association of the Company and Government guidelines prescribed in this behalf from time to time.

 

    1. The authorised share capital of CIL as on 31.3.99 was Rs. 8,904.18 crores divided into- (as given at Table –A below)

 

The paid-up capital of CIL as on 31.3.99 was Rs. 7220.54 crores comprising Rs.904.18 crores of Non-cumulative 10% redeemable preference share capital and Rs.6316.36 crores of Equity Capital issued to the Government of India, including Rs. 256.93 crores worth of Equity Shares issued to the Government of India towards the value of land acquired.

 

 

 

Table -A

 

 

  1. 90,41,800 Non-cumulative 10% redeemable

    preference shares of Rs. 1000/- each Rs.904.18 crores

  2. 8,00,00,000 Equity Shares of Rs. 1000/- each Rs. 8000.00 crores

 

 

Total Rs.8904.18 crores

 

 

 

 

The authorised share capital of the subsidiary companies of CIL as on 31.3.99 is given below:-

 

 

Subsidiary Company Authorised Share

Capital

(Rs in crores)

Bharat Coking Coal Ltd. 2500.00

Western Coalfields Ltd. 800.00

Central Coalfields Ltd. 1100.00

Eastern Coalfields Ltd. 2500.00

Northern Coalfields Ltd. 1400.00

South Eastern Coalfields Ltd. 1300.00

Mahanadi Coalfields Ltd. 500.00

Central Mine Planning &

Design Institute Limited 50.00

 

 

3.9 CIL is mainly responsible for laying down corporate objectives, approving and monitoring performance of subsidiary companies in the fields of long-term planning, conservation, research and development, production, sales, finances, recruitment, training, safety, industrial relations, wages, material for all operational matters, commissioning and execution of new as well as on-going projects, man management, production, consumer satisfaction etc. In addition, subsidiary companies perform related functions, such as maintaining liaison with concerned State Governments, acquisition of land, execution of welfare programmes, maintenance of safety standards, improvement of industrial relation etc.

 

In addition to the above functions, CIL has directly under its control the development and exploitation of the coal mines in the North-Eastern States, and the coal marketing network spread throughout the country.

 

 

WORKING RESULTS OF COAL INDIA LTD. FOR THE YEAR 1998-99.

 

3.10 CIL and its Subsidiaries have earned a pre-tax profit of Rs. 1451.79 crores in the year 1998-99 against Rs. 1803.99 Crores for the year 1997-98.

Company-wise position is shown below:

( Rs. in crores )

 

Company

1998-99

Profit(+)/Loss (-)

1997-98

Profit(+)/Loss(-)

ECL

(-) 472.47

(-) 541.89

BCCL

(-) 442.34

(-) 140.91

CCL

(-) 149.35

(-) 85.67

NCL

(+) 802.14

(+) 759.34

WCL

(+) 476.58

(+) 628.29

SECL

(+) 676.55

(+) 693.20

MCL

(+) 601.31

(+) 654.11

CMPDIL

(+) 0.63

(+) 3.30

CIL (NEC)

(+) 606.20

(+) 540.82

Sub-total

2,099.25

2,510.59

Less: Dividend from subsidiaries

647.46

706.6

Total

1451.79

1803.99

 

*Dividend of 647.46 crores includes Rs. 1.84 crores for 1997-98. The company wise distribution of balance of Rs.645.62 crores included in the accounts of CIL for the year 1998-99 is as under.

 

 

Company Rs. in Crores

 

NCL 212.83

WCL 103.98

SECL 166.12

MCL 162.69

Total 645.62

 

 

CENTRAL MINE PLANNING AND DESIGN INSTITUTE LIMITED (CMPDIL)

 

    1. Central Mine Planning and Design Institute Limited, a subsidiary of Coal India Limited is engaged in the work of exploration, project planning, detailed designing of system and sub-systems, co-ordination and integration of applied research and development, absorption of new techniques of coal mining, beneficiation and utilisation of coal, perspective planning and demand assessment and caters to the total planning and designing needs of new coal projects and re-organisation of existing mines for optimal production of coal. The company headquarters is located at Ranchi. It has its Regional Institutes located at Asansol, Dhanbad, Ranchi, Nagpur, Bilaspur, Singrauli and Bhubaneshwar to render doorstep service to the coal producing companies located in these areas. In addition, one more Regional Institute was opened on 24th January, 1992 at Tura ( Meghalaya ) to render services to Meghalaya, Arunachal Pradesh, Nagaland and Assam.

 

3.14 In addition to satisfying the planning requirement of CIL and its subsidiary companies, CMPDIL is also offering expert

consultancy services to CIL as well as outside organisations.

 

 

CONSULTANCY SERVICE WITHIN CIL

 

During the year 1998-99, expert consultancy services were provided to subsidiary companies of CIL in the field of Environmental Management and Monitoring, Remote Sensing, Energy Audit, Physico-mechanical Test on Rock and Coal Samples, Subsidence Studies, Strata Control, Non Destructive Testing (NDT), Controlled Blasting, Vibration Studies and Explosives Utilisation, Mining Electronics etc. In addition to satisfying the planning requirement of CIL and its subsidiary companies, CMPDIL (a subsidiary of CIL) is also offering expert consultancy services to CIL as well as out side organisations.

 

 

CONSULTANCY SERVICE OUTSIDE CIL (WITHIN INDIA).

 

During the year 1998-99, consultancy services were provided by CMPDIL to 22 organisations for 30 jobs. Some of the important clients/organisations to whom services were provided are Directorate General of Hydrocarbons (Ministry of Petroleum & Natural Gas), the Tata Iron & Steel Co. Ltd., the Singareni Collieries Co. Ltd., Uranium Corporation of India Limited, Haldia Dock Complex, Meghalaya Industrial Development Corporation, Integrated Coal Mining Pvt. Ltd., Remote Sensing Application Centre, U.P., Punjab State Electricity Board etc. Presently, 18 outside consultancy jobs are in hand for 17 organisations like Madhya Pradesh Electricity Board, Punjab State Electricity Board, Steel Authority of India Limited, Haldia Dock Complex, Integrated Coal Mining Pvt. Ltd., Bharat Heavy Electricals Ltd., Neyveli Lignite Corporation, Karanataka Power Corporation Ltd. etc.

 

 

BHARAT COKING COAL LIMITED (BCCL)

 

3.15 The Company has its headquarters at Dhanbad in Bihar. It had under its charge nationalised Coking Coal Mines and two mines namely Moonidih and Sudamdih transferred to it from the erstwhile National Coal Development Corporation Ltd. All these mines were re-organised into units/areas for administrative and operational convenience.

 

3.16. BCCL is the major producer of prime coking coal (raw and washed). Medium coking coal is also produced in its mines in Mohuda and Barakar areas. In addition to production of hard coke and soft coke, BCCL operates a number of sand gathering plants, a network of aerial ropeways for transport of sand and, nine Coal Washeries, namely Dugda - I, Dugda - II, Bhojudih, Patherdih, Lodna, Sudamdih, Barora, Moonidih and Rohula.

 

3.17. BCCL was referred to BIFR on 24.11.95 u/s 15(1) of SICA as its net worth became negative as on 1.4.95. As a result of the internal capital restructuring among the CIL subsidiaries, an amount of Rs.996 crores of BCCL’s debt to CIL was converted into equity and therefore BCCL’s equity increased from Rs.1122 crores to Rs.2118 crores. Though this increase of equity (paid up share capital) was taken in the audited accounts of BCCL as on 31.3.98, on the basis of advance information given to BIFR, they agreed to take BCCL out of their purview in the hearing dated 22.12.97. BIFR, however, observed that, as the accumulated loss of the company was still more than 50% of its enhanced paid up share capital and the company continued to make losses, BCCL would continue to be under watch by BIFR u/s 23 of SICA.

 

 

 

 

 

SOUTH EASTERN COALFIELDS LIMITED (SECL)

 

3.18. South Eastern Coalfields Ltd. with headquarters at Bilaspur (MP) was incorporated under the Companies Act, 1956 on 28.11.1985 but for accounting purposes, it started functioning independently from 1.4.86. The Company covers Korba (East), Korba (west), Baikunthpur, Chirimiri, Hasdeo, Sohagpur, Jamuna-Kotma and Johilla areas in Madhya Pradesh. Despite separation of coalfields in Orissa from its jurisdiction, SECL continues to be one of the leading coal producers among the subsidiaries of CIL.

 

 

WESTERN COALFIELDS LIMITED.(WCL)

 

3.19 This company has its headquarters at Nagpur ( Maharashtra ). It covers at present all the coalfields in Maharashtra and the three coalfields namely Kanhan, Pench and Patharkheda in Madhya Pradesh. WCL meets to a large extent the requirement of industries and power stations in western region of the country.

 

 

EASTERN COALFIELDS LIMITED (ECL)

 

    1. The company has its headquarters at Sanctoria in West Bengal. It covers the Raniganj coalfield in West Bengal and Mugma and Rajmahal coalfields in Bihar. This company produces coal to meet requirements of loco and other industries which require relatively higher grades of coal. ECL was referred to the BIFR on 23.11.95 under section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 as more than 50% of its

 

 

 

 

net worth was eroded. However, it was not registered as a sick company by the BIFR. ECL was again referred to BIFR on 27.11.97 u/s 15(1) of SICA as its net worth became negative as on 1.4.97. As a result of the internal capital restructuring among the CIL subsidiaries, an amount of Rs.1179.45 crores of ECL’s debt to CIL was converted to equity and therefore ECL’s equity increased from Rs.1039 crores to Rs.2218.45 crores. The BIFR in its hearing on 1.6.98 noted that the net worth of ECL became positive and the company was no longer a sick industrial company as per provision of the Act. However, on account of the fact that ECL suffered a loss of Rs.472.47 crores in 1998-99 and therefore the accumulated losses of ECL as on 31.3.99 went up from 1997-98 level of Rs.1728.60 crores to Rs.2201.07 crores. Mainly because of this increase in accumulated losses of ECL the Company’s networth as on 31.3.99 has again become negative to the extent of (-) Rs.49.35 crores and therefore ECL had no other option but to refer itself to BIFR once again on 17.11.99.

 

 

CENTRAL COALFIELDS LIMITED (CCL)

 

3.21 This company has its headquarters at Ranchi in Bihar and covers Bokaro, Ramgarh, Giridih, North and South Karanpura coalfields of Bihar. Apart from several nationalised mines, it owns most of the mines of former National Coal Development Corporation Ltd. The company produces medium coking coal (raw and washed), non-coking coal, soft coke and hard coke.

 

 

NORTHERN COALFIELDS LIMITED (NCL)

 

    1. Northern Coalfields Limited with headquarters at Singrauli ( M.P.) covers the entire Singrauli Coalfields situated in the two states of Uttar Pradesh and Madhya Pradesh. The company was incorporated under the Companies Act, 1956 on 28.11.1985; but for accounting purposes, it started functioning independently from 1.4.1986 only.

      MAHANADI COALFIELDS LIMITED (MCL)

    2. Mahanadi Coalfields Limited with its headquarters at Sambalpur, was incorporated under the Companies Act, 1956 as another subsidiary company of CIL on 3.4.1992. Its areas of jurisdiction comprise Talcher and IB valley coalfields in Orissa.

      NORTH EASTERN COALFIELDS (NEC)

    3. North Eastern Coalfields, with its headquarters at Margherita, is a unit directly controlled by CIL and is responsible for development and production of coal in the North Eastern States. The present mining activities are confined to Assam and Meghalaya. The area has large proven reserves of low ash, high calorific value coal but its high sulphur content prevents its coal to be used directly as metallurgical coal.

      SINGARENI COLLIERIES COMPANY LIMITED (SCCL)

    4. SCCL is a joint undertaking of Government of Andhra Pradesh and the Government of India. The equity capital is shared in the ratio of 51 : 49 between Government of Andhra Pradesh and the Central Government respectively. The Headquarters of the company is at Kothagudem in Andhra Pradesh.
    5. In 1994, SCCL was under reference to the BIFR as a sick industrial company within the meaning of section 3(1)(0) of the Sick Industrial Companies ( Special Provisions ) Act, 1985. A turn-around package for rehabilitation of SCCL approved by the Government of India in consultation with Government of Andhra Pradesh and the company, was submitted to the BIFR. Following this, the BIFR vide its order dated 10.1.95 decided that it was no longer necessary to pursue the case of the company under the provisions of the Sick Industrial Companies ( Special Provisions ) Act, 1985. Under section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985, SCCL became a potentially sick company on finalisation of its 1995-96 accounts. In December 1996 the company was referred to BIFR as a potentially sick company under the above cited provision of the Act. Though the accumulated losses of SCCL (as on 31.3.97) have now marginally been reduced, about 85% of the company's equity has been eroded. A capital restructuring package for improving the financial and operative performance of the company has been decided by the Central Government on 21.6.99.

 

3.27 The Company-wise details of working mines in CIL/SCCL and other companies in the country as on 30.11.98 along with the number of mines closed since nationalisation are given below:

 

 

 

 

 

Company

 Number of working mines Number of mines closed since nationalisation.

ECL

120

57

BCCL

89

16

CCL

68

13

NCL

09

01

WCL

90

38

SECL

95

17

MCL

22

--

NEC

7

--

CIL

500

142

SCCL

71

12

TISCO LTD

8

--

IISCO Ltd.

3

--

BSMDC Ltd.

1

--

DVC

1

--

J&K Minerals Ltd.

4

--

Bengal Emta Coal Mines Ltd.

1

--

TOTAL

589

154

 

 

 

 

 

 

 

CAPTIVE COAL MINING

 

3.28 Considering the need to augment thermal power generation and to create additional thermal power capacity during the VIII Plan period, the Government decided to allow private participation in the power sector. The Coal Mines (Nationalisation) Act, 1973 was amended with effect from 9th June, 1993 to allow coal for captive consumption for generation of power, washing of coal obtained from a mine and other end uses to be notified by Government from time to time in addition to the existing provision for captive coal mining for production of iron and steel. The amendment was carried out in Section 3(3)(a)(iii) of the 1973 Act by a Gezette Notification dated 9.6.93. Under this amendment, another Gazette Notification has been issued on 15.3.96 to allow production of cement as an end use for captive mining of coal. The June, 1993 amendment to the act as well as the Gazette notification of 15.3.96 apply to both the public sector and private sector companies desiring to mine coal for captive consumption. The restriction of captive mining does not apply to the state-owned coal mineral development Undertakings like CIL, SCCL. Neyveli Lignite Corporation and Mineral Development Corporations of the State Governments.

 

One hundred and Five Captive Mining Blocks (105) in the command area of CIL with an estimated reserve of 27563 million tonnes have been identified for Captive Mining. Till November, 1998, 20 parties in the public and private sector have been offered captive coal blocks for consumption in power generation, Iron & Steel industry and Cement industry.

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