Yash Verma MBA CMF 13

COAL INDUSTRY IN INDIA

Introduction State-owned miner Coal India (CIL) has chalked out a whopping Rs 59,400 crore capex programme for the current Five Year Plan period ending March, 2017 including Rs 25,000 crore for overseas acquisitions. The approved Budget Estimates for the Annual Plan 2012-13, the capital investment of CIL is Rs 4,275 crore for achieving a coal production target of 464.10 million tonnes and dispatch target of 470 million tones. a budget provision of Rs 5,000 crore has been made for acquisition of assets abroad and Rs 500 crore development of coal block in Mozambique (for 2012-13). CIL does not hand-over the responsibility of coal production to private companies, some production-related operations are carried out through hiring of equipment by CIL and its subsidiary. Government Role in Coal

Five coal blocks with an estimated reserve of 3,155 million tonnes (MT) out of 25 cancelled so far have been re-allocated to Coal India , JSPL and a consortium of public and private players, the government said today. "So far government have de-allocated 25 coal blocks allocated to various public and private sector companies," Minister of State for Coal, Pratik Prakashbapu Patil told Rajya Sabha in a written reply. Three of the de-allocated blocks -- Brahmini, Chichro Pastimal and East of Damagoria -with reserves of 2,593 MT were allocated to Coal India in 2012 while Utkal B-1 with 228 MT reserves was given to Jindal Steel and Power in 2003, The remaining one block -- Utkal A (along with Gopal Prasad block) with 333 MT of coal was given jointly to CIL subsidiary Mahanadi Coalfields, JSW Steel , Jindal Thermal, Jindal Stainless Steel and Shyam DRI in 2005

No blocks were advertised for allocation after the Bill to amend the Mines and Minerals (Development and Regulation) Act, 1957 was introduced in Parliament in 2008. The allocation of coal blocks to private companies made after 2008 is only on account of culmination of the process which was initiated prior to introduction of the Bill, The government has so far allocated a total of 195 coal blocks including 111 to private firms under the Coal Mines (Nationalisation) Act, 1973. These include 51 in Jharkhand, 41 in Chhattisgarh, 33 in Odisha, 25 in Madhya Pradesh, 24 in Maharashtra, 19 in West Bengal and one each in Andhra Pradesh and Arunachal Pradesh.

Pulling up the Coal India management this time, auditing agency CAG today said the company could have saved at least Rs 20 crore had it initiated prudent action against avoidable expenditure.

The CAG report, tabled in parliament today, said due to non-deployment of pay loaders, South Eastern Coalfields Ltd (SECL), a CIL subsidiary, failed to utilise gainfully the existing crushing facilities and to earn an additional revenue of Rs 12.76 crore during June 2010 and May 2011.

Western Coalfileds Ltd incurred an avoidable expenditure of Rs 7.62 crore during 2007-08 to 2010-11 on purchase of electricity from two electricity boards at industrial and nonindustrial rates instead of availing cheaper domestic rate for domestic consumption of electricity