Coal Industry in Present Scenario in India (Coal Scam)

1. Coal Industry in Present
Scenario in India and Coal Scam
PRESENTED BY: ANOOP MISHRA (KIIT School of Rural Management)

2. Introduction of Coal Industry in India
 Coal contributes over half of India’s primary commercial energy.
 Coal is likely to remain India’s most important source of energy
for the coming decade or two.
 However, the sector has been beset with controversies of late
such as the ‘coal-gate’ scam related to allocation of captive coal
blocks and insufficient coal production leading to questions about
who should bear the increased costs of coal imports.
 India, currently, stands eighth in terms of total World Coal
Resources, whereas it is fourth from the point of view of identified
reserves. (Geological Survey of India at 285.8 billion tones in 2011)
 Bulk of the coal reserves are confined to the south-eastern
quadrant of the country in West Bengal, Jharkhand, Orissa,
Chhattisgarh & Madhya Pradesh.

3. COAL RESERVES IN INDIA AS ON 31.03.2011 (IN MT)
Type of Coal Proved Indicated Inferred Total
Prime Coking 4614 699 0 5313
Medium Coking 12573 12001 1880 26454
Semi Coking 482 1003 222 1707
Non Coking 95739 123668 31488 250895
Tertiary Coal 594 99 799 1493
Total 114002 137471 34390 285862
 India ranks third amongst the coal producing countries of the
world in terms of annual coal production next only to China and USA.
The Coal Mines (Nationalization) Act, 1973 was amended w.e.f.
9th June 1993 to allow coal mining by both private and public sector
for captive consumption for production of iron and steel, generation
of power, washing of coal obtained from a mine and other end use.
Under the last provision, cement production was further allowed as
an end use w.e.f 5th March 1996 for captive mining of coal.

4.  The shares of overall coal resources of different States are:
18%
17%
17%
13%
13%
9%
7%
4% 2%
Overall Coal Resources of different
States
Chhattisgarh
Orissa
Jharkhand
Bihar
M.P.
Andhra Pradesh
Maharastra
West Bangal
U.P.

5. COAL HUBS

6.  Coal India is the largest public sector company,
about 80.86% of the total coal production in the
country comes from the collieries of Coal India Ltd
(CIL).
 It has eight subsidiaries: Bharat Coking Coal
Ltd., Central Coalfields Ltd., Eastern Coalfields
Ltd., Western Coalfields Ltd, South Eastern
Coalfields Ltd., Northern Coalfields Ltd., Mahanadi
Coalfields Ltd., Central Mine Planning & Design
Institute Ltd.
 The Singareni Collieries Company Limited (SCCL) is a coal-mining
company jointly owned by the Government of Andhra Pradesh and
Government of India.
Coal Industry in India

7. Year (April to March) FDI in Rs. Crore FDI in Euro million
2008-09 161.09 24.78
2009-10 829.92 127.68
2010-11 357.42 54.98
2011-12 436.61 67.17
Grand total 1,785.04 274.62
FDI in Mining sector:
Regulatory Framework of Coal Industry in India:
Coal Industry in India is regulated largely by the provisions of:
 The Coal Mines (Nationalization) Act, 1973
 To nationalize the coal sector
 Mines & Minerals (Development & Regulation) Act, 1957
 To regulate exploration and exploitation of minerals
 The Coal Bearing Area (Acquisition & Development) Act
 To facilitate acquisition of coal bearing land
 Environmental Protection Act, 1986

8. Liberalization of Policy Regime:
 Captive mining by Power, Steel and Cement industry allowed.
 Foreign Direct Investment allowed up to 100% in Power and coal mining
 Creating a competitive market for sale of coal
 Progressive reduction of custom duty on Coal and HEMM imports
 Introduction of Contract Mining
Human, labor and technology issues
Environmental and social issues

9. Coal Blocks Allocation Scam
 The Comptroller and Auditor General (CAG) of India in its incisive audit report
noted that India’s exchequer suffered a massive loss of 1.86 lakh crore due to the
distribution of coal blocks without bidding.
 The CAG report was tabled in the parliament on 17 August 2012.
 The CAG in its report stated that 57 coal blocks that were allocated to private
companies during 2004-2009.
The CAG report has also brought Prime Minister Manmohan Singh under scrutiny as
he was holding the charge of Coal Ministry from 2006 to 2009.
The CAG report also raised serious allegations against the PMO which delayed the
fair bidding process for coal blocks despite the clearance from Law and Justice
Ministry.
Tata Group, Reliance Power, Jindal Power and Steel, Abhijit Group, Bhushan
Group, Electro Steel, OP Jindal Group were some of the major beneficiaries of the coal
blocks distribution.

10. Bibliography
 Coal Directory of India
 Government of India-Ministry of Coal Annual Report
 Report on Overview of Coal Mining sector in India—VDMA
 Information from SCCL & CIL website
 www.vdmaindia.org
 http://seminarprojects.com/Thread-coal-allocation-scam-or-coalgate-ppt#ixzz2WjlkT5rG
 The government has distributed about 150 coal blocks over the past eight years.
During this period Prime Minister Manmohan Singh.
 The 1.86 lakh rupees scam is the biggest in the history of India as it surpassed the
1.7 lakh crore 2G spectrum scam.
 The most important assertion of the CAG Draft Report is that the Government had the
legal authority to auction the coal, but chose not to do so.
 Congress MP, Naveen Jindal's Jindal Steel and Power got a coal field in Feb 2009 with
reserves of 1500 million metric tones while the government-run Navratna Coal India
Ltd was refused.
 On 15 Sep 2012, an Inter Ministerial Group (IMG) headed by Zohra Chatterji (Add.
Sec. in Coal Ministry) recommended cancellation of a block allotted to JSW (Jindal Steel
Works), a Jindal Group company.