1. Coal Sector

5.1 History of coal mining in India dates back to 1744, when coal was first mined in the Raniganj coalfield in West Bengal. However, coal production in the pre-independence era and in the first two decades after independence was very slow. Annual production was stagnant at 70 million tonnes during late sixties and early seventies and was inadequate to meet growing demand of coal for generation of power and for other industrial and metallurgical purposes. The oil crisis of early seventies spurred the Government into taking a hard look at the coal sector. Recognising the importance of coal, a primary source of energy in the national economy and the massive investment needed to meet the huge demand, coal industry in India was nationalised in phases in 1972 and 1973. The primary goal for nationalised coal industry was to ensure a scientific approach to exploration and exploitation of coal deposits with due attention to safety, conservation and environmental aspects while accelerating the production level through substantial investment so as to reduce India's dependence on oil.

Coal Demand

5.2 At the time of formulation of 8th Five Year Plan, Planning Commission had assessed country's raw coal demand in 1996-97, the terminal year of the 8th Plan at 311 million tonnes. To meet this demand, Planning Commission had indicated an indigeneous coal production of 308 million tonnes for the year 1996-97. The growth rate in demand of coal was estimated to be 6.3% per annum during this plan period. Against original projection of 8th Plan, year-wise demand assessed by Planning Commission for each of the Annual Plans is given below:

Year         Demand (million tonnes)

1992-93         256.70 (5.80)

1993-94         268.80 (6.00)

1994-95         268.50 (5.00)

1995-96         288.00 (6.70)

1996-97         325.00 (7.70)

5.3 The growth rate in coal consumption in the first 3 years of 8th plan was 4.4%. Due to sluggish growth in coal consumption coal production targets were kept lower with a view to liquidate the pit head stocks.The demand again started picking up during the years 1995-96 and 1996-97.

5.4 The demand for the year 1996-97 indicated by the various coal consuming sectors had suddenly shown a sharp increase. The power sector alone asked for 210 mt (plus 5.00 mt. of middling) of coal in the year 1996-97 as against 185.30 mt. (plus 4.70 mt. of middling) indicated for the year in the beginning of the 8th plan and 194.00 mt. (plus 5.00 mt. of middlings) asked for at the time of Mid Term Appraisal carried out in Sept., 94. On the other hand, as a result of various constraints, including those of finances, land acquisition, forestry clearance, geo-mining conditions and transportation, the coal companies indicated a domestic production of only 288.65 mt.. While a stock liquidation of 2 mt. was accepted, another 5 mt. was offered from stocks in Korba coal- fields provided the Railways were able to provide the necessary transportation facilities. As a result of this, the Planning Commission had indicated that there would be a gap of 25.35 mt.in demand and supply of coal in the country during 1996-97

Production

5.5 To meet the demand as discussed above, targets and actual vis-a-vis coal production during the Eighth Five Year Plan period are given below:-

(in million tonnes)

Man Productivity( During eighth plan)

5.6 The productivity measured as output per man shift (OMS) in tonnes, achieved during 8th Five Year Plan is given below:-

(figures in tonnes)

                    UG      OC     Overall                  UG          OC          Overall

92-93          0.55        3.80     1.46                  0.70          4.46          1.04

93-94          0.55        4.00     1.52                  0.71          4.38          1.05

94-95          0.56        4.36     1.63                  0.69          4.63          1.08

95-96          0.54        4.73     1.75                  0.74          3.66          1.17

96-97          0.59        4.88     1.82                  0.74          4.25          1.20

5.7 It is apparent from the above table that overall man productivity has increased over the years both in Coal India Limited and Singareni Colliery Company Ltd.

5.8 At the time of finalization of 8th Five Year Plan, Ministry of Coal had requested for a total plan outlay of Rs. 19,374.07 crores. However, the plan size was approved at Rs. 12,357 crores. The net

budgetary support was indicated as Rs. 1795 crores(14.53%) and another Rs 986 crores was proposed to be met from external assistance routed through the budget.

During the Mid-Term Appraisal, the revised plan outlay requirement of Ministry of Coal was assessed at Rs. 14414 crores. The break-up of proposed outlay, originally approved outlay and outlay assessed during the Mid-Term Appraisal are given below at TableA

Table-A

                                                                                                            Outlay   for  8th  Five  Year  Plan  period

                                                                                    Proposed                      Approved                              Revised

                                                                                    Originally                                                                  Assessment

                        Coal   India  Ltd.                                11669.00                              8520.00                          9820.00

                        Singareni Colliery                                 2967.38                              1850.00                          2587.00

                        Company Ltd.

                        Neyveli Lignite                                     1700.69                                800.00                           800.00

                        Corporation (Mines)

                        S & T,                                                                                              87.00                              87.00

                        Regional Expl.                                        100.00                                 25.00                              45.00

                        EMP Measures                                                                                 75.00                              75.00

                        Total Coal & Lignite                           16437.07                          11357.00                         13414.00

                        NLC Power                                         2937.00                            1000.00                           1000.00

                        Grand Total                                      19374.07                          12357.00                          14414.00

5.9 The Plan outlays as approved by Planning Commission for successive Annual Plans during the 8th Five Year Plan and actual expenditure are given below :

                                                                                                       (Rs. in Crores)

Year                                      CIL                      SCCL                      S&T, Reg. Exp.

1992-93

BE                                      1850.00                  409.00                          23.00

RE                                      1760.00                  409.00                          23.00

Actual                                 1808.47                  406.45                          18.24

1993-94

BE                                      1901.00                  642.20                          17.00

RE                                      1720.00                  560.00                          17.00

Actual                                  1687.92                  544.98                          15.91

1994-95

BE                                       2062.90                  483.40                          23.50

RE                                       1850.00                  550.00                          22.99

Actual                                  1604.56                  516.58                           4.84

1995-96

BE                                      2260.00                  516.00                          43.82

RE                                      1203.78                  335.75                          25.10

Actual                                  1503.63                  259.35                         14.79

1996-97

BE                                      2143.00                  538.97                          52.80

RE                                      1310.83                  325.00                          28.00

Actual                                  1530.45                  250.06                          28.07

10. The net budgetary support as percentage of actual plan expenditure in coal and lignite sector including S & T projects, during the 8th Five Year Plan had been as given below:

Year Net Budgetary Support(%)

1992-93         13.54

1993-94          8.50

1994-95         12.55

1995-96         12.59

1996-97           7.41

5.11 The pace of plan expenditure suffered mainly due to the fund constraints

arising out of non realization of market borrowings as envisaged and non revision of coal prices of the regulated grades of coal. Besides, large amounts of outstanding undisputed coal sale dues from State Electricity Boards to Coal India Limited and Neyveli Lignite Corporation had also adversely affected the Plan expenditure.This had resulted in reducing the production potential. The financial resources constraints have also affected advance action to be taken for the projects which are to yield production during the 9th Five Year Plan.

Coal Demand

5.12 At the time of formulation of 9th Five Year Plan, Planning Commission had assessed country's raw coal demand in 2001-02, the terminal year of the 9th Plan at 412.20 million tonnes. However at the time of Midterm Appraisal of 9^th five year plan raw coal demand has been reassessed at 370.80 million tones excluding 7.70 million tones of middling. To meet this demand, Working Group on Coal and Lignite had indicated an indigenous coal production of 359.60 million tonnes (CIL=303.00 m.t. SCCL=36 m.t. and Others=20.70 m.t.) for the same period. However the total availability of indigenous coal as projected by Planning Commission was 370.60 out of which Planning Commission had given a target of 314.00 m.t. for CIL but this was not accepted by the then Ministry of Coal due to various constraints. Therefore, overall production by the terminal year of 9^th Five Year Plan was projected at 359.60 m.t. Against original projection of 9^th Plan. Year-wise demand assessed by Planning Commission for each of the year is given below:

1997-98                          323.40 (6.80)

1998-99                          325.38 (7.50)

1999-00                          311.83 (3.00)

2000-01                          333.85 (5.02)

2001-02                          370.80 (7.70) (provisional)

(Figures in bracket represent middlings.)

PRODUCTION ALL INDIA

5.13 The target for the first year of 9th Five Year Plan (1997-98) was fixed at 297.45 million tonnes. The total production during the year has been recorded as 295.80 million tonnes i.e. 99.45% of the targeted figures. The target for coal production during the year 1998-99 was fixed at 306.50 million tonnes. The projected target for 1998-99 was kept 2.85% higher over the of 1997-98 and the production recorded during the same period was 292.27 million tones. The total production target for the year 1999-2000 is 298.90 m.t. and the total production during the period of April-December, 1999 has been 208.18 million tonnes.

5.14 The all India coal demand assessed for the year 2000-01 is 333.85 million tonnes. Against this demand, availability of coal in 2000-01 is indicated as under:

                                                                       Total 327.07

Thus there would be a negligible gap between demand and supply.

                                                                                                                                                        December,99

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ECL                  32.50          27.42          32.00          27.16          29.00          16.89                          28.00

BCCL               30.70          30.92          32.30          27.17          27.50          19.86                          29.50

CCL                  33.50          33.08          35.00          32.18          33.50          20.60                          34.00

NCL                  37.00          37.12          37.00          36.52          37.50          25.99                          39.00

WCL                  30.50          32.52          32.00          31.75          32.00          23.76                          33.00

SECL                  55.50          56.63          58.70          57.56          58.00          41.53                          60.00

MCL                   39.50           42.17          41.00          43.51          41.00          30.89                         43.00

NEC                   00.80           00.69          00.85          00.64            0.60             0.31                           0.50

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CIL                  260.50          260.55        268.85         256.48        259.10          179.83                      267.00

SCCL                31.00            28.94          31.00           27.33          31.00             21.23                       31.67

TISCO/                6.40              6.31           6.65              6.46            8.80              7.12                          9.40

IISCO/DVC/

Captive                                                                          2.00

TOTAL          297.45          295.80         306.50         292.27         298.90         208.18                     308.07

---------------------------------------------------------------------------------------------------------------------------------------------

Man Productivity

5.15 The productivity is measured as output per man shift (OMS) (actual) in tonnes. The actual figures for the first 2 years of the 9th FYP i.e. 1997-98 and 1998-99 and the targeted figure for the year 1999-2000 and 2000-2001 are given below.

                    UG          OC          Overall              UG          OC          Overall

97-98                  0.57          5.07     1.93              0.76          7.01          1.45

98-99                  0.59          5.52      2.03              0.75          6.78          1.42

99-2000(Target) 0.62         5.73       2.04              0.82          7.01          1.53

99-2000             0.63          5.66      2.11              0.79          7.45          1.53

(Anticipated)

2000-01(Target) 0.66         6.04      2.25              0.83          8.18          1.58

Ninth Five Year Plan Outlay

5.16 The total plan outlay assessed by the Working Group on Coal and Lignite for 9th Five year Plan and now reassessed and proposed by Department of Coal are given below. Plan outlay is to be finalised in consultation with Planning Commission.

(Rs. in Crores)

Name of Company/         Proposed          Proposed by          Approved by          Allocation

Scheme                              by Work-         Deptt. of                  Planning              approved by

                                        ing group         Coal                      Commission              Plg.Comm.

                                        on 9th FYP                                                                  during Mid

                                                                                                                        Term Appraisal

(a) Coal India Ltd.              13,700              13,100                  13100.00                  12000.00

(b) Singareni Collie-              3,196               2,689                     2689.00                   1665.32

    ries Co. Ltd.

(c) Neyveli Lignite                  5,310          7,729.19                      6083.19                  4570.00

    Corporation

(d) Regional Exp                 l 178.10           178.10                      130. 00                      140.00

    tion.

(e) Science &                          80.00              80.00                          80.00                          80.00

    Technology

(f) Environmental                      79.03              79.00                          79.00                          79.00

    Measures and

    Subsidence Control.

(g) Detailed Drilling                      ---               91.18                           9.38                          91.18

(h) Rehabilitation &                      ---             300.00                          50.00                         50.00

    control of fire and

    subsidence in Jharia

    & Raniganj coalfields

(i) Coal Research Institute              ---              50.00                          1.00                          1.00*

(j) Regulatory Framework              ---               6.15                           6.15                          8.05

    Review Project (***)

(k) Voluntary Retirement Scheme  ---                  ---                          ----                        459.19

    through Department of Coal

(l) V.R.S.through                          ----                  ----                      400.00                      400.00

    National Renewal Fund

Total:                                      22,543.13          24,302.62              22227.72              19543.74**

(*) Now this amount will be provided for Research & Development Centre.

(**) This does not account for the provision for Voluntary Retirement Scheme (VRS) amounting to Rs. 400 crores to be funded from National Renewal Fund.

(***) To be funded out of IDA Credit

This had been agreed to during Mid-Term Appraisal meeting with Planning Commission in August, 1999. The formal approval of Planning Commission is yet to be received.

Plan Expenditure for Annual Plans of Ninth Five Year Plan

5.17 BE, RE and Actual for the year 1998-99, BE & RE and the actual upto the month of November, 1999 for the year 1999-2000 and BE 1999-2000 are given below:

Year                  CIL              SCCL                  S&T/R.E./EMSC/D.D./R.F.R.P.

1998-99

BE                  2517.00          331.57                                      92.13

RE                  1700.00          280.00                                      57.10

Actual (Prov.) 1753.73         200.49                                      44.80

1999-2000

BE                  2556.00          227.19                                      82.54

RE                  2676.19          217.20                                      63.14

Actual(Prov.) 1795.05         81.60                                        15.13

2000-01

BE **             2790.32          327.82                                    104.14

* The figures are upto November, 1999.

Eight Five Year Plan Period (1992-97)

5.18 The Planning Commission had fixed a lignite production target of 23 million tonnes for 1996-97, the terminal year of Eight Plan, which was subsequently revised to 16 MT in Annual Plan 1996-97. To meet this lignite production target and also power generation, coke and urea production, the Planning Commission had approved the following Eighth Plan outlay for Neyveli Lignite Corporation Limited:

Eighth Plan Outlay

                ( Rs crores at 1991-92 prices)

Mining Sector                  800.00

Power Sector                1000.00

Total NLC                   1800.00

5.19 The actual lignite production, power generation, urea and coke production figures viz-a-viz targets since 1992-93 are given below:

1992-93

Target                      13.30                      8358.00                      129,200              262,000

Actual                      13.31                      8324.12                      108,591              172,606

1993-94

Target                      14.50                      9923.00                      129,000              262,000

Actual                       14.15                      9396.42                      111,018              226,998

1994-95

Target                      15.00                      10457.00                      122,400              240,000

Actual                      14.41                      10893.00                      105,543              240,878

1995-96

Target                      15.50                      10640.00                      122,400              240,000

Actual                      17.21                      12267.67                      104,560              249,140

1996-97

Target                      16.00                      10685.00                      124,000              240,000

Actual                      17.35                      12704.56                      119,049              215,172

5.20 The plan outlays as approved by the Planning Commission, Revised Estimates and the actual expenditure figures during period 1992-93 to 1996-97 for Neyveli Lignite Corporation Limited are as under:

                                BE                      RE                              ACT.

1992-93

Mining                      123.00              117.18                              43.37

Power                      278.00              262.21                            147.64

Total                        401.00              379.39                            191.01

1993-94

Mining                      162.00              124.00                              43.24

Power                      233.00              191.00                              94.25

Total                      395.00                315.00                           137.49

1994-95

Mining                      211.40               121.01                           112.82

Power                      117.28               100.75                              67.58

Total                      238.68                 221.76                           180.40

1995-96

Mining                      387.24               288.41                          136.03

Power                      179.14               120.78                             45.35

Total                        566.38              409.19                            181.38

1996-97

Mining                      311.55              325.65                              135.96

Power                      247.58              201.58                                 67.81

Total                       559.13              527.23                               203.77

Ninth Five Year Plan 1997-2002

Annual Plans 1997-98,1998-99,1999-2000 and 2000-01

5.21 The actual (provisional) figures for the year 1997-98 and 1998-99 and target and achievement upto December, 1999 of lignite production, power generation, urea and coke production for the year 1999-2000 and target for the year 2000-01 are given below:

                        (million tonnes)           (million units)                    (tonnes)                      (tonnes)

1997-98

Target                      16.50                          11365.00                      124,000                          240,000

Actual (Prov.)          18.10                          13402.27                      102,690                          233,963

1998-99

Target                      17.50                          11715.00                      105,000                          240,000

Actual(Prov.)          18.17                          13340.00                         67,834                          205,269

1999-2000

Target                      17.50                          12431.00                          96,000                          240,000

(Achievement          12.67                            9703.44                           17204                          100,128

Upto December,99)

2000-01(Target)     17.50                          12421.00                          137,000                          240,000

Expenditure

5.22 Budget, Revised Estimates, Actual 1997-98 and 1998-99, BE & RE and Actual upto November, 1999 for the year 1999-2000 and BE for the year 2000-01 for NLC are as under:

                                                                                                            (Rs. in crores)

                                                    -----                                      ------                                      -----------

1997-98                                       584.77                                  327.50                                      168.28

1998-99                                      1112.05                                  750.00                                      581.93

1999-2000 (up to Nov.                 872.62                                  821.86                                      354.90 (prov.)

1999)

2000-01                                      1168.45                                      -----                                          ------

5.23 The Planning Commission has approved the following Ninth Plan Outlay for Neyveli Lignite Corporation Limited.

Ninth Plan Outlay                      Rs in Crores

Mining Sector                                  2581.80

Power Sector                                  1866.36

Total NCL                                      4448.16

5.24 The Plan Outlays as approved by the Planning Commission and the actual expenditure figures for 1997-98 and 1998-99 for Neyveli Lignite Corporation Limited are as under :

( Rs in Crores)

5.25 The Plan Outlays as approved by Planning Commission for Neyveli Lignite Corporation Limited for 1999-2000 and proposed for RE 1999-2000 and BE 2000-01are as under :

(Rs. in crores)

FOREIGN COLLABORATION

5.26 To meet country's growing demand for coal, foreign collaboration with the advanced coal producing countries are considered for:

(a) bringing in new technologies both in underground and opencast sectors for efficient management in the coal industry and skill development and training etc.

(b) seeking bilateral funds for import of equipment which are not manufactured in the country.

(c) bringing foreign financial assistance to meet the investment requirement.

5.27 Keeping these objectives in view, Joint Working Group on coal had been set up with France, Germany, Russia,Canada, Australia and China. Department of coal is also the nodal Department for the Joint Commission with Poland. The priority areas, inter-alia, include acquisition of modern underground mining technology, introduction of high productive opencast mining technology, working underground in difficult geological conditions, fire control and mine safety. Training of Indian personnel as well as assimilation of the technology are an important consideration. With the liberalisation of the economy, greater thrust is being given to get the foreign investments/assistance on the basis of cost competitiveness.

5.28 Indian coal PSUs are now also offering their expertise to other developing countries viz China and Tanzania.

COLLABORATION WITH CANADA

5.29 The expansion phase of Rajmahal opencast project of Eastern Coalfield Limited from 5 Mty to 10.5 Mty has been completed by the Canadian Commercial Corporation on a turn-key basis with financing of the Canadian goods and services by Export Development Corporation of Canada. Presently there is no active cooperation with Canada in the coal sector.

COLLABORATION WITH FRANCE

5.30 France has developed expertise in thick seam underground mining with the introduction of advanced technologies like Blasting Galleries and Longwall Sub-level Caving. It has assisted India in introduction of blasting gallery method at East Katras (Bharat Coking Coal Limited) and Chora (Eastern Coalified Limited). France has also assisted in the introduction of sub-level caving technology at East Katras mine of Bharat Coking Coal Limited. France had also cooperated in the introduction of high face longwall mining technology in Kottadih Project of ECL.

5.31 GDK-10 (Block B) and GDK-8 incline projects in SCCL were taken up for introducing blasting gallery technology in collaboration with France. These two projects have already been completed. SCCL has signed another contract for introducing Blasting Gallery method at VK-7 project, which is under implementation.

5.32 Training Centre at Burradhemo (Eastern Coalifield Limited) had formally been inaugurated in April, 1994 and phased training programme with the French assistance were successfully completed. This Training Centre will be used to impart training to the personnel of coal mining companies.

5.33 In order to strengthen the cooperation between two countries and broaden the scope of cooperation especially in coal industry, a Joint Working Group on coal was constituted, which used to meet annually to address the various problems covering bilateral cooperation. In view of the declining cooperation with France in the field of coal, it has been decided to merge this Working Group with the proposed Working Group on Energy. First meeting of Working Group on Energy was held on 15^th-16^th March, 1999 at New Delhi. .

COLLABORATION WITH U.K.

5.34 In January, 1997 an Indo-British Coal Forum (IBCF) was established to foster greater cooperation between the two countries in coal sector. The Forum provides a platform for mutual consultations and cooperation between the coal industries of both the countries under the auspices of the Govt. of the India and U.K.. The activities which are envisaged under the MOU include sharing of latest know-how technology, organisation of meetings for exchange of information, identification of suitable projects as well as methods of funding, introduction of compatible technology for more efficient management in Indian Coal Industry and skill development etc. Five meetings have been held till now in pursuance of these objectives. The fifth meeting of IBCF was held on 28^th June, 1999 in U.K.

COLLABORATION WITH POLAND

5.35 Department of Coal is acting as the nodal Department for Indo-Polish Joint Commission on Economic, Trade, Scientific and Technical Cooperation. The last meeting (14th) of the Joint Commission was held in January, 1996. The Commission has 4 sub-committees on (1) Coal Mining and power (2) Trade (3) Industry and (4) Science and Technology.

5.36 The Projects which were taken earlier in coal sector with Poland have since been completed but the Polish Coal Industry has offered their expertise in underground mining, washery construction, mine safety and rescue. For furthering Indo-Polish Cooperation in coal sector, it was decided by both sides to form a Working Group for coal sector. The first meeting of the Indo-Polish Working Group on Coal was held in Warsaw, Poland on 14^th of October, 1998.

COLLABORATION WITH RUSSIA

5.37 The erstwhile USSR was assisting CIL in the implementation of the Nighai opencast project(Northern Coalfields Ltd.), Khadia opencast project (Northern Coalfields Ltd.), Jhanjra underground project (Eastern Coalfields Ltd.) etc. The cost of the imported equipment for these projects was funded from the credit , while the payment for deputation of experts for rendering technical assistance was made in Indian Rupees under the Bilateral Trade plan.

5.38 Indo-Russian Working Group on coal has so far met six time. The projects which are currently going on with Russian co-operation are Master planning of Talcher,Ib-valley and Korba coalfields, extension of validity period of MOU between CMPDIL and Giproshakht for another three years(upto 12^th July,2002) and coal production , development in Raigarh and Bisrampur coalfields.

5.39 Germany is providing financial assistance for the following projects of Neyveli Lignite Corporation Limited.

For Projects such as Second Thermal Stage II, Second Mine Stage-II, Float Machine, Bucket Wheel Excavator 1400 Ltr. and for preparation of a Master Plan for Lignite Sector, etc., Neyveli III Loan (No. 8465924) has been sanctioned for DM 532 Million. Out of this loan, upto 31.12.99, DM 527.677 Million has been utilised.

Assistance from KfW has been finalised on 26.04.97 for DM 65 Million for the schemes like Life Extension / Rejuvenation to four nos. of 700 Ltr. Bucket Wheel Excavators in Mine-I and Life Extension programme of units pertaining to TPS-I. A sum of DM 37.044 Million has been drawn upto 31.12.99.

In respect of Expansion of Mine-I and TPS-I, NLC has entered into an agreement for obtaining a loan of DM 375.2 Million (about Rs.730 crores) from KfW, German financial institution on 13.03.97. Against this, the utilisation upto 31.12.99 is DM 169.742 Million.

CoLLABORation with China

5.40 During the visit of the Govt. of India delegation under the leadership of

Coal Minister, a Joint Working Group had been constituted for bilateral co-operation between the Indian and Chinese coal industries. So far five meetings of Joint Working Group have been held, the fifth one held in February, 1999.

5.41 Chinese side had signed three agreements for longwall projects in South

Eastern Coalfields Limited(SECL) in Sept. 1995. One longwall face at Balrampur is working since may, 1998. The other at Rajendra commenced its production since December, 1998. The face at New Kumda mine is likely to start by January, 2000

5.42 During the last meeting of the Working Group;, the Indian side had shown their renewed interest for the development of opencast mines in China with Indian technology and expertise. Chinese have deferred for three years the development of Xianfeng opencast mine in China which was offered to CMPDI.

Back