coal policy of India slide

1. Prakash Singh
M.Phil 2015-16
IIFM, Bhopal(M.P.)

2. The Ministry of Coal determines the policies and
strategies related to :-
 Exploration and development of coal and lignite
reserves.
 Sanctioning of important projects of high value
 Deciding all related issues.
These functions are exercised through :-
 Coal India Ltd
 Neyveli Lignite Corporation Ltd.
 A joint venture with Govt. of AP called Singareni
Collieries Company Limited.

3.  Develop an eco-friendly, environmentally
sustainable and cost effective coal industry to
provide safety and support to various industry-
sectors of the country.
 Facilitate state-of-art technology and resource
optimization in Indian coal sector inclusive
economic growth of the country.
 Comply with all the requirements of quality
management system.
 Constant improvement in its effectiveness.
 Promotion of socially responsible and transparent
governance system.

4.  Applicant consumer is required to achieve the
milestones related to the project given in the
letter of assurance which will be valid till 12 to
24 months as applicable. Failing this, LoA will
be liable to be terminated and commitment
guarantee forfeited.
 However, the validity period of LOA can be
extended by the competent authority on the
recommendation of Standing Linkage
Committee (LT)

5.  Fuel supply agreements (FSAs) will be signed
for the domestic coal quantity of 65%, 67% and
75% of annual contracted quantity (ACQ) for
the remaining four years of the 12th five year
plan for the power plant having normal power
linkages to meet the power supply of thermal
power plants (TPP) of 78000 MW capacity.
 Tapering linkage would get supply according
to the tapering linkage policy

6.  To meet the balance FSA obligations of the
requirement of 78000 MW TPPs, CIL may
import coal and supply the same to the willing
power plants on cost plus basis.
 Power plants may also import coal themselves,
if they opt so.

7.  All coal mine owners shall adopt a Mine Closure
Plan for each of their mines comprising
progressive closure plan and final closure plan
duly approved by the competent authority
 The competent authority for approval of the Mine
Closure Plan shall be the Standing Committee
constituted by the Ministry of Coal for the purpose
of approval of Mining Plans. In case of
projects/mines of Government Companies, the
competent authority to approve the MCP will be
the concerned Board of the Company wherever the
power is so delegated for approval of the Mining
Plan.

8.  Four copies of MCPs of all mines shall be
submitted to Ministry of Coal within one
month of the approval within the timeframe
indicated.
 The Companies shall carry out all changes in
the Closure Plan including the amount of
money to be deposited for the proposed
Escrow Account as directed by Ministry of
Coal.

9.  The Mine Closure Plans will have two
components viz. i) Progressive or Concurrent
Mine Closure Plan and ii) Final Mine Closure
Plan.
 The money to be provided per hectare of total
Project Area for the purpose is to be deposited
every year after commencement of any activity
on the land for the mine after opening a Fixed
Deposit Escrow Account prior to obtaining
mine opening permission from Coal Controller.

10.  If the Mine owners fail to deposit the annual
amount required to be deposited, the
Government can withdraw the mining
permission.
 The details of the final Mine Closure Plan along
with the details of the updated cost estimates
for various mine closure activities and the
Escrow Account already set up shall be
submitted to the Ministry of Coal for approval
at least five years before the intended final
closure of the mine.

11.  Mining is to be carried out in a phased manner
initiating afforestation/reclamation work in the
mined out area of the first phase while
commencing the mining in the second phase.
 The Government may at any time before the
closure of mine require certain activities to be
included in the mine closure plans, which it
may consider necessary for the safety and
conservation of environment or in compliance
with any modification/ amendment in the
relevant legislation.

12.  The mine owner shall undertake to provide the
additional fund equivalent to the gap in
funding before five years of Mine Closure
failing which it may be recovered by such other
methods as the competent authority may deem
fit in this regard.
 After the closure of the mine, the reclaimed
leasehold area and any structure thereon,
which is not to be utilized by the mine owner,
shall be surrendered to the State Govt.
concerned following a laid down procedure.

13.  Any consumer with a FSA may set up a washery
for his own consumption of washed coal or any
private or public sector enterprise may set up and
operate washery on behalf of such consumer on
the land subject to certain conditions.
 Washery operator shall have MoU with the
consumer or group of consumers, who has an FSA
or long term coal linkage with a coal company, for
production of predetermined quantity of washed
coal, middling if any and rejects.

14.  While selecting technology for the washery,
due consideration shall be given to the coal
conservation.
 Normally, the life of the washery shall not be
less than 20 years.
 The minimum throughput capacity of a
washery should be 2.0 Mt
 Water and electricity during construction
period shall be provided by respective coal
companies at one point on chargeable basis, if
available.

15.  Water for operation of the washery shall, in
general, be arranged by the washery operators.
 The washery operator shall arrange electricity
for operation of the washery on his own.
 In case of the washeries of the consumers the
coal company will supply agreed quality and
quantity of raw coal in terms of its long term
fuel supply agreement.

16.  Railway siding facilities will be provided by
the coal companies to the washeries of the
consumers or their washery operators on
chargeable basis.
 The prospective Washery operator shall
provide basic technological features of the
washery to coal companies prior to set up.
 Monthly returns shall have to be submitted by
the washery operator to the coal companies
concerned to avoid any chance of malpractice

17.  The Government decided to de-regulate the
prices of soft coke, hard coke and D grade of
non-coking coal.
 The Government also decided to allow CIL
and SCCL to fix prices of E, F and G grades of
non-coking coal once in every six months by
updating the cost indices as per the escalation
formula .

18.  Under the Colliery Control Order, 2000, the
Central Government has no power to fix the
prices of coal.
 The Tariff Commission is being involved in
pricing of coal for the Power Sector and to
suggest modalities for pricing of coal for other
sectors to control the monopoly situation in the
coal market .

19.  The consumers desiring linkage for supply of
coal should apply for linkage to the SLC (long
Term). The consumers should route the
application through the concerned Ministry to
the Chairman, SLC (LT).
 The Additional Secretary in the Ministry of
Coal, Govt. of India is the Chairman of the
Standing Linkage Committee for power and
cement sectors

20.  The Government had exempted the prices and
distribution of coking coal from the provisions
of Colliery Control Order.
 Consumers having a projected requirement
upto 5000 MT of coal per month and desiring
drawal of coal from CIL are required to submit
linkage application, in the prescribed
proforma.

21.  In case any consumer does not draw supplies
continuously for 24 consecutive months, the
linkage is treated as `snapped‘.
 Linkages are not granted to the seasonal
industries like manual brick manufacturing
units.
 Consumer requiring coal, more than 5000
tonnes per month are required to obtain a
clearance from the ministry of coal before
obtaining formal linkage by CIL .

22.  Coal is under Open General Licence (OGL) list.
 Export to Nepal and Bhutan is done in rupee
exchange as per the protocol between the two
countries and with Bangladesh it is done in US
Dollar.
 Export of coal by CIL is made through tender
route .
 Coking coal is being imported by Steel Authority
of India Limited (SAIL) and other Steel sector
manufacturing.
 Non-coking coal on consideration of transport
logistic and commercial prudence as well as export
entitlements.

23.  Coal India (regulation of transfers and
validation) Act, 2000
 Amendment to the Coal Mines
(Nationalization ) Act, 1973 to promote non-
captive mining of coal

24. Carried out in two stages:-
 In the first stage, Geological Survey of
India(GSI) undertakes Regional Exploration for
locating potential coal bearing areas on a
continuous basis.
 In the second stage, Detailed Exploration is
carried out by CMPDI directly as well as
through Mineral Exploration Corporation ,
State Govts. and private agencies.

25. Colliery control order 2000 order talks about :-
 Definitions of ‘coal’, ‘coal controller’, ‘colliery’,
‘disposal’, ‘agent’, and ‘size’.
 Categorisation of coal.
 Procedure for categorisation of coal.
 Submission of returns and information to Coal
Controller.
 Directions to regulate the disposal of coal
stocks

26.  Power of the Coal Controller for quality
surveillance.
 Power to prohibit or limit the mining or
production of coal.
 Requirement of prior permission to open a coal
mine, seam or section of a seam.
 Notice of suspension or closure.

27.  Power to restrict sub-division of a coal mine.
 Power to inspect collieries.
 Delegation of powers to Coal Controller.
 Power to exempt.

28.  Price and distribution of all grades of coal have
been deregulated.
 Coal Companies are allocating coking coal to
steel plants for their requirements.
 For core sector, sale of coal is guided by
linkages and allocations by the competent
authorities.
 For non-core Sector consumers CIL has decided
to authorize its subsidiary companies to
formulate their own system and procedure for
sale of coal to this sector.

29.  The State Government company is authorised
to do coal or lignite mining by its
Memorandum and Articles of Association.
 The company will do coal or lignite mining in
accordance with the provisions of the Coal
Mines (Nationalisation) Act, 1973, the Mines &
Minerals (Development &. Regulation) Act,
1957, the Contract Labour (Regulation &
Abolition) Act, 1970, and all other mineral,
environmental and labour laws and other
regulations governing the Indian coal industry.

30.  For coal the company shall obtain a certificate
from CIL. For lignite, Neyveli Lignite
Corporation.
 The proposed mining area has not been
allotted to a captive mining company.
 No financial assistance from the Central
Government or CIL or Neyveli Lignite
Corporation shall be provided.

31.  None of the coal or lignite mines operated by
the company will be taken over by the Central
Government or Coal India Limited or Neyveli
Lignite Corporation in the event of closure of
such a mine.
 No employee of the company, engaged in a
coal or lignite mine operated by it, will be
absorbed in CIL or Neyveli Lignite
Corporation.

32.  The Govt. had approved the sale of coal to non-
core sector through electronic marketing on
Internet on trial basis in BCCL.
 The Govt. decided to sell 20 million tonnes of coal
by CIL subsidiaries through e-marketing for the
year 2005-06 on trial basis.
 The scheme is open to consumers and traders who
can participate and bid for the quantity as per their
requirement from their preferred sources.
 The floor price of coal would be limited to 20%
above the notified price of coal.

33. 100% foreign investment in the equity of an Indian
subsidiary of a foreign company may be allowed
subject to the conditions that such an Indian
subsidiary:-
 Shall not do coal mining and
 Shall not sell the washed coal or sized coal
from their Coal Processing Plants in the open
market and shall supply the washed coal from
their Coal Processing Plants

34.  The other private Indian companies engaged in
exploration or mining of coal and lignite for
captive consumption for production of iron
and steel and production of cement may be
allowed foreign equity upto 100%.

35. The parties eligible to do coal mining in India
without the restriction of captive consumption
are:-
 The Central Govt., a Govt. company (including a
State Govt. company), a Corp.owned, managed
and controlled by the Central Govt.
 A person to whom a sub-lease has been granted by
the above mentioned Govt. company or corp.
having a coal mining lease, subject to the
conditions that the coal reserves covered by the
sub-lease are in isolated small pockets.

36. A company engaged in the following activities can
do coal mining in India only for captive
consumption:-
 production of iron and steel
 generation of power
 washing of coal obtained from a mine, or
 such other end use as the Central Government
may, by notification, specify
Special dispensations provided for setting up of
associated coal companies by the end -user parties
offered captive coal blocks

37. The plan document should contain:-
 Cover Page
 Documents to be enclosed
 Summarised Data
 Information regarding earlier approved Mining Plans,
if any.
 Location
 Geology and exploration details
 Mining details
 End use of coal/ lignite
 Environmental management
 Progressive and final mine closure plan
 Other

38. The chapter should contain:-
 Introduction
 Details of Earlier Approval of Mining Plan
 Location, topography & Communication
 Exploration, Geology, Seam sequence, Coal Quality
and Reserves
 Mining details
 Manpower, Safety and Supervision
 Coal Handling, Washing & Mode of Dispatch
 Infrastructure Facilities proposed and their location.
 Land Requirement
 Environment management
 Progressive and Final Mine Closure Plan
Annexures as required.