Coal Production

Indian Coal Sector- Some Recommendations

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Coal India and CHinaET052809_indiaAs discussed in my previous post about the sorrow plight of Indian Coal Sector. The demand supply gap of Indian Domestic sector is increasing with each succeeding year (161MT ;2011-12). Under the umbrella of this mismatch between demand supply of Indigenous coal sector ,various recommendations have been put forward which can be summarized as:

Innovation and Technology:

  1. 1.Increase in Coal Production :Today, as the world has already started looking after a ‘sustainable practice’, in any domain and industrial and commercial practices, we really need to start assessing our potential and compare practices in the country vis-a-vis the other parts of the world which are more advanced in the sector. There can be 4 major advantages with the advent of new technology like Higher returns(IRR),Lower environmental degradation, lower per tonne of ore cost and higher production realization. An example of innovation in coal mining is  moving from smaller capacity shovel to bucket sizes of even 25-30cu m capacities depending on factors like mine geology, size of mine etc. having digging capacities of the order of 11,000 MT/hr.
  2. Effective exploitation of resources: Evaluation of mineral resources required typical geological models and various geological technologies and the prospect of getting coal reserves in those particular areas is heavily dependent on the extracted data. As on April 2011

Total coal resource: Proved -114001.60,Indicated- 137471.10,Inferred- 34389.51, Total – 285862.21 .
Due to various limitations of the renewable sector, there is a need to tap our huge coal reserves. As far coal mining is concerned ,most of the mining practices are Open case mines(around 90%) as compared to Under ground mining thereby leading the drop in net coal production in some areas where the coal seam in as below as 90-100KM.Some of the prominent steps that can lead to increase in coal production are Use of proper and scientifically proven mining technology, Adopting the correct mining method (OCM/Long wall/other variants), Combining smaller mining areas to develop these into one single mine of large capacities, Promoting mining industries to have a maximum level of extraction by giving them incentives/tax rebates, Close monitoring by our government agencies in each mining project to crosscheck,the progress of each mining project in terms of percentage extraction,Meeting targets of mining projects not only in terms of production (per annum),but also on per annum level of extraction to match with the overall mineable reserves of a mining project.

     3. Coal Quality Improvements : Indian Coal is characterized by high ash content, low sulphur,low moisture content. Lower washeability index, lower liberalization size. Due to these peculiar problems in Indian coal, there comes the need to go for importing of coal. CFRI(Central Fuel Research Institute,Dhanbad) has proposed some of the methods to improve wash ability index of the coal  like improved froth floatation process, oil agglomeration process, oleo floatation process.(http://eprints.nmlindia.org/5887/1/Chap_9.PDF)

   4. Improving Infrastructure and transport: One of the major issues being faced by the industry for the coal movement within India is transportation and infrastructure. Following are the major challenges being faced in coal transportation:

-Lack of availability of proper transportation mode for produced coal

• Mismatch between the demand and supply of railway wagons

• Lack of infrastructure to support a coal movement at full capacities

Some of the steps to improve the transport facilities and infrastructural requirements in order to compliment the coal industry rather than hamper its progress are as follows:

• Enhanced road connectivity across mineral zones and consumers

• Infrastructure developments driven by PPP

• Restructuring and/or reallocation of railway networks to connect with the coal

bearing areas

• Doubling of railway routes at places where coal movement is higher

• Enhancing port capacities as well as evacuation efficiency and augmenting the

existing capacities from existing ports.

Policies and Regulations: Without relevant policies measures and regulations every step will be of no use. Government has recommended various policy measures in its report of Coal Competitiveness and they can be summarized as follows: 

  • Auction of Coal licenses/ non coal minerals through competitive bidding and thereby leading to a boost In investor confidence.
  • MMDR Bill 2011 guaranteed annuity of 26 % to the local population, thereby increasing the inclusion of host population in the mining process in particular area.
  • Drafting of national sustainable energy framework for mining areas.
  • Thrust on exploration on mineral resources by AMD, GSI, CMPDIL and MECL and classification of mineral resources as per the United Nations Framework Classification (UNFC) code.
  • Setting up of coal regulatory authority that will act as watch dog for coal pricing mechanism in India.
  • Single window clearance mechanism for taking the clearance such environment, land etc.

Above mentioned recommendations and policy regulations if implemented with proper strategy will ultimately transform India from Coal Importer country to Coal Exporter Country in the near future.

References : Report of Indian Chambers of Commerce,MoP,Newspaper Abstracts etc.

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