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The
Challenges of
Energizing India
Partha
S. Bhattacharya,
Chairman,
CIL, is responsible
for introducing
the most crucial
state-of-the art
technology to
accomplish the
three key objectives
- boost productivity,
reach and engage
customers more
effectively and
improve operating
efficiency. He
speaks to
Amrita Chatterjee
on the
future challenges
and how the low
cost production
will help the
Indian Coal Industry
take off from
the position of
domestic leader
to global player
in the energy
sector. Excerpts.
Statistics can
sometimes be mind-blowing
- 473 mines, 78
areas, 424,000
employees, operations
in eight states
across the country.
The single largest
coal producing
company in the
world, Coal India
Ltd. (CIL), continues
to grow at a compound
rate of 5.0 percent
every year. CIL
supplies as much
as 84 percent
of the country's
total coal requirement
at the utmost
competitive price.
A wholly-owned
Government of
India Enterprise,
under Ministry
of Coal with its
headquarters in
Kolkata, CIL is
an apex body with
seven subsidiary
companies. Of
the total 473
mines that CIL
operates, 283
are underground,
155 opencast and
35 mixed. It also
operates 19 Coal
Beneficiation
Plants. In short,
CIL encompasses
the whole gamut
of identification
of coal reserves,
mining, processing
and production.
Is it
the low cost of
production that
is helping CIL
to make greater
profits and contribute
a significant
share to the revenue
of India?
In India, CIL
offers coal at
one-third of international
prices. We supply
huge amount of
coal at a discounted
price, which is
50-60 percent
less than international
prices. It is
the most competitive
price in the matter
of global context,
adding tremendous
boost to the financial
viability of the
company. During
the fiscal 2007-08,
CIL made a profit
of Rs. 87.38 billion,
paying Rs 43.80
billion to Government
exchequer by way
of corporate tax
and dividend tax.
Further, by way
of royalty, cess
and other taxes
CIL paid Rs. 59.99
billion during
the year.
I take great pride
in saying that
CIL produced 379.46
million tonnes
(MTs) of raw coal
in 2007-08. Coal
take to consumers
was the highest-ever
at 375.33 MTs
in the same year,
its all because
of the low cost
coal supply in
India that we
provide.
There
is still a substantial
gap between indigenous
availability and
demand…
To gear up to
meet the demand
on indigenous
coal, CIL is making
all out efforts
to augment coal
production so
as to minimize
the gap between
indigenous availability
and demand. In
this direction,
CIL has decided
to mine large
volumes of coal
lying in few of
its abandoned
mines. Well, they
are called abandoned
because they remain
unutilized mainly
because of inadequate
technology.
CIL has achieved
not only the highest
ever coal off-take
of 375.32 million
tonnes, but also
the highest ever
coal off-take
growth over the
previous year
by 24.18 million
tonnes. In percentage
terms, it is 6.9
percent. However,
despite such strong
favourable growth,
22 power stations
continue to remain
critical as stocks
at power house-end
have actually
reduced from 14
million tonnes
to 10.5 million
tonnes i.e. by
about 3.5 million
tonnes. The poor
coal stock position
at powerhouse-end
continues to remain
a cause of concern.
As a leader
in the energy
sector, CIL is
expected to fulfill
multi-dimensional
challenges in
the years to come.
How CIL plans
to meet the future
challenges?
For this purpose,
CIL has identified
122 coal projects
with a capacity
of about 295 MTs
to be taken during
next five years
till 2011-12.
About 97 projects,
31 projects with
a capacity of
95.37 MT's are
in different stages
of implementation.
Currently, the
total coal demand
of the country
is likely to reach
731 MT's by 2011-12
from 379 MT's
in 2007-08. Looking
further at the
future perspective,
CIL envisages
reaching a production
of 664 MT's in
2016-17.
CIL is on the
lookout for joint
venture partners
with technical
competence to
mine these reserves.
A global expression
of interest has
been floated recently.
Also I would like
to mention that
CIL has taken
on an ambitious
programme - Power
for all by 2012
- thus tremendous
efforts are being
made in increasing
the production
capacity.
Is this the reason
behind the company
primarily focusing
on underground
mining?
Earlier, the focus
was not given
to underground
(UG) mining, till
now; only 14 percent
of CIL coal is
produced through
underground mining
while the rest
86 percent comes
through open cast
means. At present
production rate
there is a danger
that open cast
reserves may not
last longer than
30 years. This,
eventually, brings
the complete focus
on underground
production.
To sustain the
reserves that
India needs for
longer period
of time CIL is
refocusing on
UG production
for tapping large
reserves below
300 metres depth.
Of late, CIL has
set its eyes on
developing UG
mines in a big
way by adopting
state-of-the-art
mass production
technology. CIL
is on the lookout
for internationally
reputed and proven
mine developers
and operators
for building the
infrastructure
of UG mining blocks
on a long-term
contract basis.
How you would
like to define
the Indian coal
industry as compared
to countries like
the US, China
and Australia?
Coal continues
to be the mainstay
of India's energy
needs. As much
as 78 percent
of total coal
produced by Coal
India is catered
to power utilities
in India. The
demand is very
high and we are
still lagging
behind in terms
of technology.
Countries like
the US, China,
and Australia
are much more
productive due
to the advanced
technology and
well mechanized
infrastructure.
Indian coal is
largely thermal
and the operations
are manually done
or are semi-mechanized
at some places.
Though I feel
there is not much
difference in
the cost of production,
but the advanced
technology enables
them to utilize
their coal reserve
potential to the
fullest.
Thus occasions
like 9th International
Mining and Machinery
Exhibition (IMME)
to be held in
Kolkata from 5th
November onwards
is a one-stop
opportunity to
get clarification
on technological
issues. It's a
platform where
our experts can
meet the professionals
coming from countries
outside India,
and lot of scope
is created for
knowledge sharing
and networking.
What are the other
major challenges
for CIL?
Well, the competitiveness
of a generic product
like coal primarily
centers on quality
and price. Our
price is good
but quality not
consistent. To
make the product
globally competitive
it is necessary
to bring qualitative
international
standard consistency
which is currently
the major thrust
area of CIL. Thus,
organizations
with requisite
core competence
are being engaged
for creating coal
beneficiation
facilities. CIL
has decided to
set up coal washeries,
in all its prospective
open cast mines
of capacity 2.5
million tonnes
and above. In
order to be quality
consistent washing
coal is required.
In first phase
CIL is going to
set up 28 washeries
at a cost of US
$ 374 Million.
This will be done
associating private
enterprises with
core competence
in coal washing
practices.
The emphasis given
on price and quality
is mainly to attract
more investors
in a developing
country like India?
Well, not just
to attract investors
but the emphasis
is given on price
and quality to
ensure the development
of our indigenous
allied industries
as well. Yes,
it is a fact we
need to attract
more investors
for the development
of the country
and for that CIL
is has a comprehensive
plan in order
to make sure that
we give the best
price without
compromising with
the quality. Already
a lot many investors
have chosen India
as their destination
for establishing
cement plants
and power plants.
What is
CIL's take on
assigning IT a
position in the
functioning of
an enterprise?
Application of
IT is extremely
important in functioning
of operations
in the field.
We have introduced
an operator independent
truck dispatch
system, it's a
GPS based system.
About eight mines
have been identified
for introducing
this system. It
will guide the
dumper on the
status of the
dumping zones.
This will ensure
optimal usage
of manpower and
equipment.
Coal mining activity
is accompanied
by a lot of environmental
hazards like degradation
of land, deforestation,
habitat destruction
etc.
This is an extremely
important issue.
To promote transparency
in environmental
sustainability,
CIL will be undertaking
satellite surveillance
of all opencast
coal projects
of five million
tonnes capacity
and more to track
reclamation and
renovation activities
and to monitor
the restoration
made to the original
habitat. The satellite
images will be
regularly updated
in the website.
Also CIL has intensified
tree plantation
work since 1993-94
and the total
population done
so far is over
68.95 million
trees covering
an area of approximately
26,605 hectares.
Currently, we
are laying great
stress on the
Environmental
Impact Assessment
(EIA), which is
thoroughly practiced
by CIL.
What about
the rehabilitation
and resettlement
policies, some
serious modifications
has been demanded
for a long time.
Good question!
CIL has adopted
a modified Rehabilitation
and Resettlement
(R&R) policy
in March 2008
in consonance
with R&R policy.
It will be more
project-affected
people friendly.
CIL will be pursuing
an inclusive model
of growth by ensuring
that affected
people are included
in the decision
making process.
The aim is to
pursue best practice
CSR around coal
mining areas and
improve the quality
of life' with
community consensus
and active participation
of people involved.
As a corporate
Citizen of India,
to what extent
CIL is conscious
of its responsibility
towards the well
being of community.
CIL seriously
pursues social
responsibility
and recognizes
it as core to
taking its business
forward. Unless
the quality of
the lives is not
improved, the
very purpose of
our efforts will
be meaningless.
We invest in a
holistic way in
creating infrastructure
like provision
for drinking water,
construction of
school buildings,
check dams, village
roads, health
centres, market
places etc. At
the same time
skill developments
capacity building
like vocational
training, income
generation programs,
and entrepreneurship
development programs
are largely conducted.
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