PROJECT ON SALES AND MARKETING OF COAL

(CENTRAL COALFIELD LTD. RANCHI)

Organized by:-

Submitted in partial fulfillment of the

Requirements for the award of Degree of
Bachelor of Business Administration

Submitted by:-
Anuj Kumar Giri
Course- BBA (Hons.)
Session-2008-11
Lovely professional University, Punjab

Central Coalfield Limited, Ranchi (Jharkhand)

 CERTIFICATE

This is to certify that the dissertation entitled “TRAINING ON SALES

AND MARKETING OF COAL” with special reference to Central
Coalfield Ltd. Headquarter “Darbhanga House” has been prepared by
ANUJ KUMAR GIRI, in practical fulfillment of requirement program
course BBA (Hons.) from LOVELY PROFESSIONAL
UNIVERSITY, PUNJAB. I appreciate his skill, diligence and sense of
commitment in preparation of the project. (17/06/2010 to 30/07/2010)

Mr. R.B. Lal Mr. J. Gabrial

Project Guide G.M (HRD)
Sales officer CCL, Headquarter CCL Headquarter
Darbhanga House, Ranchi Darbhanga House, Ranchi

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 ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this work is
no different. It precedes the help and guidance of many people directly
and indirectly. This project is also the outcomes of the assistance,
guidance and suggestions of various officials inside CCL.
I would like to sincerely express my thanks to Mr. V.B. Sahay,
General manager ( S&M ) to give permission for the training and Mr. R.B.
Lal Sr. Sales Officer, Miss. Nishi Suman Minz (Sales Officer) for guiding
me more familiar with my topic and for his continuous guidance,
encouragement and inspiring suggestions.
I would also like to thank Mr. J. Gabrial, General Manager
(HRD) for his valuable suggestions and guidance for preparing the project
report.

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 CONTENTS

Sl. No. Particulars Page Nos.

1. INTRODUCTION 5 -7

2. RESEARCH METHADOLOGY 8 -9

3. COMPANY PROFILE 10 - 19

4. PRODUCTION 20 - 22

5. MARKETING SET UP 23 - 26

6. COMPETITORS 27 - 28

7. MARKETING MIX 28 - 42

8. DISTRIBUTION (METHOD & PROBLEMS) 43 - 45

9. NEW SCHEME FOR DISTRIBUTION 46 - 50

10. ANALYSIS & CONCLUSION 51 - 54

11. BIBLIOGRAPHY 55

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 INTRODUCTION

Coal India Ltd:

Coal India Limited (CIL) is a public sector undertaking of the Indian
Government. It is the world's largest coal miner. It is owned entirely by
the Union Government, under the administrative control of the Ministry
of Coal. It is involved in coal mining and production industry . Indian
Coal at the pithead is the cheapest Coal in the world with low sulphur
content. Indian Coal is eco-friendly; CIL’s business plan therefore aims
primarily to translate these strong economic fundamental of Coal into
prosperity for the country and the company.
With eight wholly owned subsidiary companies, operating in many
states, CIL’s activities comprehensively over A to Z in Coal extraction.
Identification of coal reserves, detailed exploration followed by
projectisation, design and implementation of projects and optimizing
operation in 465 existing underground and open cast mines, 17
beneficiation plan plants and one coal carbonization plant are some in
CIL’s range of activities.
CIL welcome private participation in coal beneficiation.
Participation of international coal mining companies in development of
underground coal mines with modern technology is also receiving CIL’s
consideration.
The government of India, the sole owner of CIL, has sanctioned
major policy support package which, besides restricting government’s
holding in the company, has progressively freed coal prices from
administrative control. Coal mining is also being opened up to private
investment.
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 OBJECTIVE FOR STUDY

 To know and understand the present sales and marketing system of

Central Coalfield Limited (CCL), Ranchi.
 To know the present scenario of Central Coalfield Limited.
 To know the marketing and distribution strategies (method &
problem) in Central Coalfield Limited (CCL)
 To know the initiative taken by the company for his/her employee
working in the organization.
 To know the dispatches of coal to consumers.
 To study the competitors of the company.

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 IMPORTANT EVENTS

o 1743 Commercial production of coal by east India company for the

manufacture of arms and ammunition.
o 1815 Opening of the first shaft mine near Raniganj town.
o 1843 MIS Carr. Tagore and other company amalgamated into the
Bengal Company Ltd. This was the first joint stock company in India.
o 1853 Commencement of Railways service in India.
o 1855 Opening up of railways from Culcutta to Raniganj, the the
turning point of Coal industry in India.
o 1862 Coal mine began in central province Jharia Coalfield by the
Government of India undertaking 1st phase of Coal nationalization.
o 1965 Formation of National Coal Development Corporation Ltd.
o 1971 Coking Coal Nationalization.
o 1973 Non-Coking Coal Nationalization.
o 1975 Establishment of Coal India Ltd. (CIL)
o 1985 Northern Coalfield Limited (NCL) and south eastern Coalfield
Limited (SECL) carved out of CCL and WCL.
o 1992 Mahanadi Coalfield Limited (MCL) formed out of SECL to
manage the talcher and IB Valley Coalfield in Orissa.
o 2000 De- regulation of Coal pricing and distribution of coal.
o 2007 Coal India & five of its subsidiaries viz, NCL, CCL, SECL,
MCL, WCL conferred “Mini Ratna” status.

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 RESEARCH
METHODOLOGY

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SOURCE OF INFORMATION

The information is based on:

Primary Data: primary data were gathered through personal interviews
of CCL official.

Secondary Data: secondary data were collected from the various

published report, circulars, journals and books relating to Coal and
publication of different institution including foreign magazines on the
topic.

Constraints in Data collection:

Different Coal consumers belonging to public enterprises and
private industries could not be interviewed due to shortage of time. Most
of the executives of CCL, Consumers and railways officers are reluctant
to give relevant information due to their internal policy of maintaining
secrecy.

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 COMPANY PROFILE

VISION
Being the domestic leader, CCL strive to be leading international
player in energy sector through best practices from mine to market.

MISSION
The mission of Coal India is to produce and market the planned
quantity of coal efficiently and economically with due respect to safety,
conservation and quantity.

PROFILE
Coal India Ltd. Is the 3rd largest Coal producing company in the
world having about 5 lacks employee with headquarter in Calcutta is a
holding company under ministry of Coal, Govt. of India, for the entire
Coal industry in the country barring the Coal mine in A.P (which comes
under the jurisdiction of Singreni Collieries Company Ltd. and Govt. of
A.P) and the captive mine of TISCO, IISCO and DVC. It was formed as
a public sector undertaking in Nov. 1975, for recognizing the
nationalized Coal mines and ensuring integrated development, the prime
source of energy.
Coal India presently contributes 90% of total Coal production
companies- ECL, BCCL, NCL, WCL, MCL, SECL and the CMPDIL for
mine planning, designing and engg. Consultancy services. The mine of
North Eastern Coalfield (Assam and Meghalaya) and Dankuni Coal

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Company (DCC) in West Bengal operates directly under Coal India. Coal
India currently 465 and 19 washier spread over and 8 states to produce
and beneficiate Coal for meeting the demand of consumer all over the
country. The ranges of products are: Raw coal (coking and non-coking),
Washed coal, Middling, soft coke & Hard coke, coal, tar, coal gas, coal
chemicals etc.

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 BUSINESS OBJECTIVES

 To carry on business of Coal mining.

 Acquisition of Coal mining.

 Production, sale and disposal of Coal and its bi-products.

 Coal benefaction, manufacturing Coke, bi-product of Coal and

other business.

 Reorganization and reconstruction of Coal mines taken over by

Govt.

 Policy formulation and advisory functions.

 To act as an entrepreneur on behalf of state in respect of Coal

Industry.

 To finance replacement expenditure.

 To develop technical know-how.

 Exploration and prospecting.

 To manufacture and sell Coal as a patent fuel.

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  To act as a colliery and mine proprietors, coke manufactures in all
their respective branches.

ROLE OF CCL

1. To get implemented the policy and program laid down by the

government of India. CIL ensures working in accordance with the
guidelines and directions issued by them from time to time.
2. To keep them informed of the program with regard to implementation
of their policies and progress in accordance with the guideline and
direction issued by them.
3. To plan and carryout all operations in such a manner that there is no
risk of loss, injury or damage to the health of workman.
4. To adopt techniques and methods working such that loss of coal
Reserves by ways similar to other reasons and blockage of reserved in
barriers etc. in the east.
5. To draw annual plans for production, preparation and dispatch of coal
Connect activities keeping in priority wise demand.
6. To draw out inputs of various equipments that is plant and machinery,
Stores & spares, land and building etc.

7. To keep down cost in all possible ways so as to get maximum profit.

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8. To take care of housing, water supply, recreational, education, medical
& other facilities for the social security of employees to the extend it is
reasonable & practicable.

9. To maintain harmonious industrial relation.

10.To arrange for necessary fund and utilize that in the most advantageous
manner.

SUBSIDIARIES OF CIL

S. NAME OF THE COMPANY H.Q STATE

N
1. Eastern Coalfield Ltd. (ECL) Sanctoria West Bengal

2. Western Coalfield Ltd. (WCL) Nagpur Maharashtra

3. Bharat Coking Coalfield Ltd. Dhanbad Jharkhnad
(BCCL)
4. Central Coalfield Ltd. (CCL) Ranchi Jharkhand
5. South Eastern Coalfield Ltd. Bilaspur Chattisgarh
(SECL)
6. Northern Coalfield Ltd. (NCL) Singrauli M. Pradesh

7. Mahanadi Coalfield Ltd. (MCL) Sambalpur Orissa

8. Central Mines Planning & Design Ranchi Jharkhand
Ltd. (CMPDIL)

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 PIONEERING CONTRIBUTION

Over the Central Coalfield Ltd. has made pioneering to the Coal industry
in the following areas:
 Detail contribution to establish minable Coal reserve.
 Planned exploration coal reserve mainly in outlying areas.
 Introduction of scientific method of mining through collaboration with
foreign countries.
 Opening of large capacity underground and open cast mines
 Training and skill development of large cadre of engineering,
technicians and executives.
 Evolution modern management techniques.
 Welfare of employee.
 Community development and tribal welfare.
 Resolving intra-company problem.

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 COMMAND AREA

The command area of CCL comprises of 10 Coalfields namely Giridih,

East and Bokaro, North and South Karnpura, Jayanti, Daltonganj,
Aurangabad, Hutar, Ramgarh and Kaitha. The total areas of these
Coalfields are appro. 2700 sq. kms, out of which based on techno-
economic consideration only 750 sq. kms, is amenable to mining
operation. All these Coalfields are located in the chotanagpur region of
Jharkhand.

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 COAL RESERVES
The total reserves of these Coalfields (Proves, indicated and
inferred) are around 34 billion tones, 14.023 billions tones of coking and
Semi-Coking variety and 19.539 billion tones of Non-Coking variety.

S.N AREAS H.Q COAL FIELD

1. Giridih Kargali Giridih/Jayanti

2. Dhori Dhori East Bokaro

3. Bokaro & Kargali Kargli East Bokaro
4. Kathara Kathara East Bokaro
5. Hazaribagh Charhi West Bokaro

6. Kuju Kuju West Bokaro

7. Argada Sirka South Karnpura

8. Sayal Sayal “D” South Karnpura

9. Barka Sayal Barkakana South Karnpura

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10. North Karnpura Dakara North Karnpura

11. Piparwar Piparwar North Karnpura

12. Rajrappa Rajrappa Ramgarh

13. Rajhara Rajhara Daltonganj
14. Bokaro Coalfield Washries Kathara East Bokaro

MAIN FUNCTION OF CCL

 To act toward achieving co-operative objectives and approve

review strategies for achieving these objectives.
 To establish policies regarding long term planning, conservation,
research and development, finance, recruitment, training, safety
industrial relation, wages, marketing, purchase and stores.
 To set target and monitor them.
 To approve budgets, determine standard cost and retention price
and evaluate performances.
 To co-ordinate among the subsidiary company.
 To lay down over all policy regarding Coal distribution.
 To establish board linkage to consumer to Coalfields.
 To maintain liaison with major customers.
 To make on behalf of subsidiaries, such as purchase of plants,
equipment of high unit and value in short supply.
 All imports and export to be routed CIL, and to operate a common
cadre for CIL and its subsidiaries.

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Under this recruitment of personal at the level of executives would be
done by CIL alone. CIL has to arrange training and to allot them to
companies. The subsidiary companies are responsible to deliver Coal,
maintain control and carry out after sale service, once the distribution and
board linkage are decided. Subsidiary company are also responsible to
realize sale proceeds of Coal bills. Coal India will be involved when
there are inter-company problems requiring common approach to
consumers carries etc…

PRESENT SCENARIO OF CCL

Numbers of Mines 63 Mines

(26 Underground & 37 Opencast Mines)

Washries 7 Washries
4 Medium Coking Coal Washries.
3 Non-coking Coal Wahries.

Workshop 1 Central Workshop

5 Regional Workshop (The central W/S & 3
regional W/S are ISO 9001)

Operating Coalfield 6 (East Bokaro, West Bokaro, North

Karanpura, South Karnpura, Ramgarh &
Giridih)

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 PRODUCTION
CCL has maintained an upward trend in production. The manual
production of raw Coal which was 15 million tones in 1973-74(the year
of nationalization) touched the level of 43.2 million tones in 2008-09.
The major challenge of increasing production however, came in the
aftermath of the re-organization of CCL’s jurisdiction in 1986, when two
or more Coalfields viz. Singrauli in M.P, U.P.& Talchar in Orissa went
cut of its jurisdiction with nearly 4C % of its annual growth in
production for many years.

OVERBURDEN REMOVAL
Since over 80.5% of the production is from open cast mines, overburden
removal is an essential part of production.

WASHING COAL
CCL has 7 Coal washries situated at Piparwar, Kedla, Kargali, Kathara,
Sawang, Gidi, Rajrappa with the total input capacity of 21.07 million

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tones. Efforts to optimize the capacity utilization of these washries have
resulted in continued improvement in washed Coal production.

The table below shows the production and productivity figures achieved
by C.C.L during the year 2006-2007 as compared to the targets for the
year and actual of 2005-2006.

Particulars 2006-2007 2007-2008 2008-2009

Target Actual Target Actual Target Actual
Production
From OC (MT) 39.970 39.364 42 42.31 46.75 41.68
From UG (MT) 2.630 1.955 2 1.83 2.25 1.56
TOTAL (MT) 42.000 41.895 44 44.14 49.00 43.24

(OC- Open Cast Mining, UG- Under Ground mining, MT- Million Tones)

Graphical presentation of comparison of last five years production

and productivity in C.C.L.

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 YEARS
(Y-axis shows production in million tones and X-axis shows years)

DISPACHES TO CONSUMER
Among CCL’s major consumer are power house , steel plants, fertilizers
industries, cement plants, medium and small industries, bricks
manufacturers and domestic consumer.
Suitability of Coal
Industry Type of Coal Required
Steel making Coking and semi-coking coal,
direct feed and washed; blendable
coal; low ash % Assam and
Ranigunj coal
Steel making, sponge iron industry Non-coking coal of high Initial
Deformation Temperature (IDT)
(>1200 degrees Celcius)
Cokeries / coke oven plants Coking and semi-coking coal

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Briquette making / domestic fuel Semi-coking and non-coking coal;
making middling & rejects of washeries
Special Smokeless Fuel (SSF) Semi-coking coal of Coking Index
8 – 10
Non-coking coal; middlings of
Power sector coking coal washeries; washed coal
of non-coking coal washeries
Cement sector Non-coking coal; middlings of
coking coal washeries
Glass and potteries Long Flame non-coking coal
Cast iron castings Hard coke
Steel castings Non-coking coal
Non-coking coal; middlings of
Bricks
coking coal washeries
Old boilers Non-coking coal; middlings of
coking coal washeries

MARKETING
POLICY

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 MARKETING SET UP OF COAL

Marketing is very important branch of any organization. It plays the

dominant role in the strengthening of the organization. In case of coal
industry due to monopolistic market scenario, Coal marketing was not
much a problem in the past. However with the liberalization of the
economy and easy availability of imported coal by many consumers,
marketing is now playing a very important role in the entire operation
activities of Central Coalfield Limited (CCL).

CONSUMER OF COAL
Coal is fossil, is the prime commercial energy source in India. It
contributing 90 % of the total energy reduced and consumed. Coal India
is perceived to be the synonyms of Indian Coal Industry. The observation

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about the global setting of the Coal sector is not fully reluctant in the
Indian context. Change in technology and change in mining method have
resulted in cost reduction in real term. With no significant breakthrough
in tapping non- conventional energy source in foreseeable future and
limited petroleum resources, coal continues to be main source of energy.
75%

POWER
STEEL
CEMENT
FERTILIZER
SPONGE IRON
CPP
7% OTHERS*
10%
2%
3%
3% 1%

SEGMENTATION OF COAL MARKET

In contrast to modern market scenario, Coal is the product with

difference. This is because after the nationalization of CIL, the customers
of Coal are widely dispersed all over the country and they are divided
into various based on sizes, consumption, characteristic and
requirements.
The various segment of Coal consumers are:

CORE SECTOR

Bulks of coal dispatched to the core sector. The segment consists of bulk
consumers, which contribute to the infrastructure development of the
country. The customers are power houses, steel plants and few coke
ovens. This segments account for 85% of the total consumption.

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NON CORE SECTOR

After the core sector, the major consumer of Coal is non-core sector.
This segment includes industries like textiles, paper, chemicals,
fertilizers, re-factories, engg. Industries, foundries, glass, ceramic
industries etc. this segment consist of nearly 40,000 small industries and
medium scale industries having individual consumption of about 1000
tonnes to several tones per annum.

SEASONAL BUYERS

This segment consists of very small number of consumer of Coal in

particular season. The segment contributes 6 % of dispatch. Such
seasonal consumers are manufactures, tobacco farmers and tea gardeners.

DOMESTIC SECTOR

This is very small segment of consumers as compared with the

consumption of the other segment. But in the term of number, it has a
large number of consumers. This segment consists of more than 6 million
households consuming about 5% of the total market. Consumers are
mostly located in the states of Bihar, West Bengal, U.P., Delhi, Punjab,
Himachal Pradesh and other Northern states. Requirements of this
segment is totally met through intermediaries and other Northern states

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 COMPETITORS
The post nationalization years saw an increasing coal demand which
creates monopoly in coal. The managerial attitudes with ownership, with
a demand far exceeding the level of production of CIL and its subsidiary
organization, performance within Coal Industry had also declined. There
was little besides distribution of Coal that could be called True
Marketing.
At present the Coal Industry is not under a major threat competition even
with linearization of different sectors. It is expected that carrying on with
things as they are today. The coal industry shall remain in the monopoly
position for much as a decade. It is after this, that Govt. policy of
liberalization shall be felt in its fullest strength. This is because, by this
period, the private mines shall have positioned themselves in the open
market. Liberalization in our country is still in its initial phase.

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MARKETING
MIX

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 PRODUCT
Central Coalfield Ltd. dealing with coal as a product is the third largest
Coal provider in the world. It provides many types of coal according to
buyer’s need.
There are two types of Coal, the company generally deals with:
 Coking Coal
 Non –coking Coal

Coking coal:-

The coal when heated in the absence of air, free from volatiles with
strong and porus mass is called coking coal. The features are as follows:

 It is used for hard Coke manufacturing.

 It is mainly used by steel companies and metallurgical industries.
 The Coal has coking properties.

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Non coking coal:-

The Coal which does not have coking properties is non coking coal. The
features are as follows:
 It is mainly used for power generation by thermal grade
companies.
 It is used by Cement, Fertilizers, Glass, Ceramic, Paper, Chemical,
Bricks manufacturing and other heating purpose.

Coal stock as on 31/7/2007 stood at 11.37 million tones.

The other types of Coal which the company deals with are as follow:
 Washed Coal
 Power Coal
 Slurry Coal
 Reject Coal
 Soft Coal

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  Hard coal
Washed Coal:
Such Coal which have undergone process of coal washing causing value
addition of coal by way of reduction in ash percentage.

Power Coal:
Power coals are those coal which the company purchase for its own use,
i.e production of power for self use. It is mainly used by steel plants.

Slurry Coal:
Slurry are fine particle of coal which are generally used by brick making
companies.

Reject Coal:
Those coal which has more quantity of ash.

Soft Coal:
Soft coals are those which come from Dankuni Coal Complex using low
temperature carbonization of non coking coal in vertical resorts. These
are used in furnace plant, boilers industrial plants as well as power
houses, CIL Industries, pharmaceutical company.etc

Hard coal:
Hard Coal are formed from semi coking through the process
carbonization. It is mainly used in metallurgical industries and also
industrial plants.

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On the basis of size, coal is of two types:

Steam form:
Steam forms are those which are more than 250 mm in size.

Slack form:
Slack forms are those which are less than 250 mm in size.

PLACE

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 PRICE
DOMESTIC PRICE FIXATION

Government of India deregulated the price of Non-Coking Coal of grades

A, B & C. Coking Coal and semi / weekly Coking Coal on 22.03.1996.
Subsequently, on 12.03.1997 Government of India deregulated the price
of non- coking coal of grade D, hard coke and soft coke and also allowed
Coal India Ltd. to fix coal price of grade E, F & G till jan 2000 once in
every six months updating cost indices as per escalation formula
contained in the 1987 report of the Bureau of Industrial cost and price.
With effect from 01.01.200, CIL is free to fix the prices of such grades of
coal in relation to the market prices.

Pursuant of the above, CIL fixed the prices of deregulated coal from time
to time and last such revision has been made on 12.12.2007.

Grade wise basic price of coal at the pit head excluding statutory levies
for Run of mine (ROM) Non long flame Coal, Long Flame Coal,
Cooking Coal, Semi Coking Coal & Weakly Coking Coal, Direct Feed
Coal, Assam Coal for various subsidiaries of CIL are table below:

Basic Price of Run of Mine Non-Long-Flame Non-Coking Coal

(In Rupees/ Tonne)

Field/ Co. A B C D E F G

ECL(for 8 units vide Annex

1710 1540 1290 1040 780 610 430
II)
ECL / Mugma(for 16 units
1970 1750 1500 1240 990 740 480
vide Annex IV)
ECL / Rajmahal - - - - 1020 870 700
BCCL 1660 1510 1250 1040 830 660 470
CCL 1620 1460 1220 1000 790 630 450

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 NCL 1490 1340 1100 920 740 580 430
SECL 1310 1220 1050 880 730 570 430
MCL 1280 1130 950 790 620 480 350

PROMOTION
Promotion is the development and discrimination of persuasive
communication about the offer designed to attract customers and to
persuade them to act. In its broadest sense it encompasses all selling
activities, personal selling sales promotion and publicity. A company
may have a well designed product, with a price and a distribution system
appropriate to its largest market hut if it is unable to reach that market
then all its default will have been in vain.

Too many consumers, promotion and selling are synonymous with

marketing, but promotion certainly represents a large part of the
marketing effort, but if it is of course only a part of the marketing mix.
The way various element of marketing mix come together depends upon
the marketing objective of the organization and therefore promotional
strategies must be made with reference these objectives. This means that
the rate of promotion in the marketing mix depends upon the role of the
other element of the marketing mix.

Therefore is a lot of promotional activities in GIL, in general and CCL in

particular. From time to time, they do advertising through media
regarding the quantity, quality, place and price of Coal available for sale.
The different distribution medium is also notified to the consumers
through media to make it convenient for them to buy the right type of
coal from the right place and on right price according to the equipment.
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The company promotes the buyers’ be the services. The service provided
to the customer at the time of bidding through spot e-auction and forward
e-auction. Spot e-auction held four times in a month & Forward e-auction
held quarterly for long term requirement of the customer. Company
registered in MSTC site according to term and condition. After e-auction
date the product dispatch to their customer. Seven days before buyers
have to pay money for the e- auction.

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 WHAT’S NEW
New Initiative taken by Coal India Ltd.
CIL, with an impressive track record in meeting the energy
needs by registering a growth in production in excess of 5 %
annually over the years, is aiming at playing a more purposeful role
in establishing itself as prime supplier of energy to the nation.

In this respect, CIL has not restricted itself within the

conventional gamut of coal mining, but also exploring the
possibility of expanding its horizon in harnessing the potential of
non-conventional energy source as also to expand its pressure
beyond the boundaries of country.

The various initiatives already taken in this direction are

summarized below:

Coal bed methane (CBM)

CIL is involved in 2 CBM projects.

UNDP Demonstration project:

A demonstration project named “Coal Bed Methane’’ recovery &

commercial utilization has been taken by the Govt. of India in
collaboration with Unites Nation Development Program & Global
Environment Facility. The project has been sanctioned by Govt. of India

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during Sept,1999 and the project is now under implementation at
sudamdih and Moonidih mines at BCCL. The present technical assistance

project draws on the recommendation put forth in India’s ninth Five Year
Plan recommending the development of new source of energy. The
UNDP-GEF project will support technical assistance and in country
capacity building in areas of methane recovery and use. Through
representative demonstration plants, the project will introduce advances
techniques of gas resources assessment and recovery and also utilization
method relevant for India Coal mining conditions. Drilling is in progress,
first bore hole drilled up to 1059.30.

CIL & ONCG JV

Govt. of India through has allotted 2 blocks. One in Raniganj and

Other in Jharia Coalfield approx. of 356 and 85 sq. km. respectively
on nomination basis to the consortium of CIL and ONGC. Work is
in progress. Petroleum Exploration license for both the block has
been obtained from respective state Govt.

At Jharia, 8 no. of slim hole drilling from GIL end is complete since
30.12.2004 by development of 3 Rigs.

A total of 8703.65 MT’s have been drilled since commencement.

CBM related test has been carried out.

At Raniganj CBM block, drilling startedon 26.05.2006 by

developing 2 drilling rings, one of CMPDI and one of NEC. A total
of 3982.50 MT’s have been drilled since commencement.

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e- Marketing of Coal
The sale of Coal through e-auction scheme is considered to be the
most rational system of sale of Coal through which it is at the same time
objective, equitable, transparent and above all, beneficial to all those
users of coal who do not have official channel to purchase coal, either
because they were closed down and subsequently revived after fresh
effort and require Coal to start their operation.

Objectives of scheme

 To provide equal opportunities to all intending buyers for purchase

of Coal / Coal products through single window service.
 To provide wider choice of source, grade/ size, mode for all type of
customers including small customers / traders.
 To facilitate creation of large no. of cutlets across the country for all
customers through customer-friendly system of sale of coal / coal
products making use of modern technology.
 To evolve a market –driven Coal pricing mechanism through inter
play of market forces of demand and supply by shifting away from
administrative price regime. Buyer can get access to coal at self
determined prices.
 To provide a legitimate channel of supply of Coal to an ever
growing no. of new industries, non-linked consumer with
snapped / lapsed linkage, customers requiring Coal above their
specified permissible quantities. If any seasonal consumer such as
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 brick manufacturers, SSI & tiny industries, cottage industrial or
any other buyers in distress and also buyers purchasing Coal for
resale purpose.
Coal India proposes to increase allocation Coal under e-
marketing, so that the market mechanization of price determination
based on supply and demand is just judiciously established.

Coal videsh

In India, techno-economically recoverable reverse of good quality

coking coal and high grade low ash non-coking coal are not adequate to
meet indigenous requirement and thus import of such coal has been
resorted to bridge the gap.
Since, demand of coal is increasing at faster rate, it is felt
necessary that CIL should venture for coal mining abroad, where such
coal is available, to facilitate bridging the gap. With this objective, it
has been proposed to form a separate company “Coal Videsh”. CIL
board has approved the proposal which needs approval of the Govt.
meanwhile, a dedicated “Coal Videsh” department consisting of
multidisciplinary team has been opened in CIL. The team has been
started visiting South Africa, Mozambique and Zimbabwe to explore
strategic business opportunities in these countries. CIL is also actively
pursuing business intelligence activities by closely tracking the business
opportunities in Australia, Indonesia and Russia.

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Coal liquefaction
Coal India Limited had approached CIL to become a partner in its
venture of producing CIL from coal in its Duliajan plant in Assam and
requested for supply of about 3.5 mt p.a of coal NEC. CMPDIL has
prepared a report on possibilities of producing 3.5 MTPA coal from
NEC, GIL and CIL held a meeting to discuss future possibilities on July
11, 2005 wherein CIL indicated that the tentative cost of production of
CIL obtained from this process is about US $ 35 per barrel which
appears to be quite attractive particularly view of bargaining CCL price
in international market which has reached up to US $ 65 per barrel. It
has decided to form a “Joint Task Force” of GIL which would study the
CMPDI report for possibility of coal production of 3.5 MT p.a from
NEC and examine enhancement of scheduled of production, examine
possibility of formation of 2 joint venture, 1 for coal production find
other for setting up of Coal Liquefaction plant and its upstream activities
Underground Coal Gasification (UCG)
UCG is the in-situ gasification of coal in the seam. It is achieved by
injecting oxidant, gasifying the coal and bringing the product gas has to
surface through bore holes grill from the surface. The gas is used for
power generation, industrial heating or as chemical feedback.
Coal India has given high priority to the issue of UCG. CIL and
ONGC are likely to take up jointly a pilot project for establishment
UGC technology. A MOU has been signed between CIL & ONGC 3 rd
Nov, 2005. Further drilling for additional data generation is one of the

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prospective which is been taken up. Initial work of data exchange,
needed for identification of trial site, has already been taken up.

Over ground Coal Gasification (OCG)

Director (planning and business development), GAIL (INDIA) Ltd.

may director (Technical) Coal India Ltd. on 20th July 2005 in
connection with their interest to make a JV with CIL for joint
evaluation of work in various Coal sector related potential
opportunities.

A draft memorandum of corporation (MOC) has been drafted. MOC

includes the scope of work for this JV in the field of over ground Coal
Gasification, CIL and GAIL have taken up drawing of a road map to
accomplish the objective jointly in right earnest.

Power Plant

CIL is also contemplating setting LI of power plant JV. In this

connection, CIL is in negotiation, with both NLC & NTPC for power
plant in Orissa.

Switchover – categories of Coal from UHF to GCV

Effort are being made to assess the possibility of making the

categorization of coal from UHF basis to GCV basis, trial are being
conducted at MCL & NCL result of which are yet to be obtained.

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COAL NET

Coal India had taken initiative in development and implementation of

COAL NET. Application S / w an integrated solution, to bring
uniformly across its subsidiary companies and entrusted the activities to
IIT, Kharagpur in the year 2001. The application s/w has been
developed and implemented at CIL and is subsidiary (HQ’s). Necessary
LAN has been set up at respective subsidiary (HQ’s) for COAL NET
s/w. the same is being upgraded for faster access of application data.

Telecommunication link have been set up over satellite media

(VSAT system) and leased lines of BSNL interconnecting CIL HQ’s,
subsidiary HQ’s and MOC for voice, data and video conferencing in an
integrated manner for seamless flow of information over the network.
Similarly rollout of network is under process of implementation for 11
extending such facilities from subsidiary HQ’s to area offices, regional
stores, projects, Coal loading points etc.

Considering significant role of telecommunication and IT in

providing a proper decision support system at area level, CIL has been
and MCL for implementation of Coal Net application software.
Necessary infrastructure preparation has been carried by respective
subsidiary and implementation is in progress, initiative has been
communication.

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 DISTRIBUTION
(METHODS & PROBLEM)
FACTOR AFFECTING CHOICE OF TRANSPORT METHOD

 The type of Coal to be transported.

 The amount of Coal to be transported.
 The distance to be transported.
 The facilities at the loading point.
 The facilities at the consumer’s premises.
 The access at the consumer’s premises.
 The number of transfers involved which may cause degradation
of coal.

AVAILABLE MEANS OF TRANSPORT

RAIL
Largest users including Power sectors may be able to make use of
rail transport which is often organized on merry go round system.
Where the same rolling slack, designed for rapid loading and
unloading, travel between supply point and the consumer.

ROAD

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 Small proportion of Coal used by the industries is carried by road.
The commercial vehicle used for this purpose differs mainly in the
method of unloading.

WATER
In the past coastal city and inland water ways were used extensively
for transportation of Coal, by this method has been almost supersedes
by the kind transport.
CONVEYOR
Some very large power one losses built adjacent to Coal preparation
plants can be supplied directly by conveyor, but that is rare.

PROBLEM IN TRANSPORTATION OF COAL

 Railways
 Roadways

Problem in railways transport

Currently 75% of total dispatches are by rail transport. Hence
railways are the most importance means of transport of Coal & Coke.
It is paradoxical that Coal India has added 6 million tones of Coal to its
slack, even then consumers were in distress due to the scarcity of
Coal/Coke; Coal India official blame railways for the letter’s inability
to supply adequate no. of wagons passing the buck is a time honored
preoccupation of the railways of Coal authorities. While railways
speak man complain of loading wagons, CIL officials periodically site
instance when the railways send to many wagons to a particularly
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loading point on a day when workers are always on holidays and the
complain in the next day at the press conference about how scores of
wagon lies unloaded.

Problems in roadways transport

According to estimates made by the COAL INDIA about 20% of the
dispatches are made by the road. CIL does not encourage the road
dispatches due to its certain disadvantages. This cost is substantially
higher than the rail freight. Due the increase in the CIL prices the cost
of road transport has increased which ultimately affect in the increase
of the landed price of coal and coke. Consumers whose requirement
cannot be met due to the poor wagon supply are constraints to life by
road by paying higher prices. Road transport may not be considered
uneconomical within a 100 km radius of the pithead, but at a time
when factories in North and South India, thousand miles away from the
pitheads, are transporting by truck the current practice goes completely
again the professed intension of the Govt. energy policy, which aims at
minimizing CIL consumption and maximizing Coal consumption.

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 NEW COAL
DISTRIBUTION POLICY

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 NEW COAL DISTRIBUTION POLICY
As we already know that there are two types of sectors i.e. Core and
Non-core. The CIL and Govt. of India approve the new coal distribution
policy which is as follows:

(1) Classification of consumers:

Classification of consumers into core and non-core has been
reviewed instead of each consumer would be treated on merit
keeping in view, inter-alia the regulators provisions applicable there
to and other relevant factors.

(2) Distribution and pricing of coal to different consumers sector

 Defense sector and railway will get total of their Coal
requirement at notified price.
 Power utilities including independent power plants, captive
power plants (CPP) and fertilizer sector 100% of quantity as per
the normative requirement of the consumers would be
considered for Fuel supply agreement (FSA) by Coal India Ltd.
at fixed price to be declared. The unit/power plant which are yet
to be commissioned but whose coal requirements has already
been assessed and accepted by ministry of coal and linkage/

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 letter of assurance (LOA) approved as well as future
commitment would also be covered according.

(3) Other consumers:

We know that 75% of the quantity as per the requirement of the
consumer / actual users would be considered for supply of coal through
e- auction at Notified price, to be fixed and declared CIL. The
remaining 25% of coal get by e-auction as per their preference.
At present small and tiny consumers in Non-core sector, whose
Annual consumption is less than 500 metric tones are eligible to get
coal through state nominated agencies/NCCF etc. the minimum
quantity through state agencies is 400 tones per annum will take coal
through Coal India Ltd. subsidiary companies through FSA’s. for the
non-core sector and annual requirement is less than 4200 tones, they
have to be entered in FSA by showing satisfaction level document of
they to go state guises.
(4) Small consumers & medium consumers:
Small & medium consumers like smokeless fuel brick kiln etc.
have to be registered under FSA with coal companies by the state govt.
agencies.
Till further the state Govt. notified the agency, the fuel supply
agreement would be based on firm commitment and compensation for
default in performance on either side.

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 The price charged to such agency would be the same as notified
price as applicable to other consumers. The agency may charge freight
up to 5% margin as service charge. The quantity allocated to this sector
may be received on the basis of their performance in the beginning of
every year. Allocation of quantity is based on the consumption pattern
in past.

(5) Replacement of linkage system by Fuel Supply Agreement (FSA):

If the buyers do not maintain continuation in FSA with six month
in a year then they may be allocated the coal at auction.

(6) Policy for new consumers:

New consumers have to be allocated the coal after issuing letter
of assurance (LOA) valid for 24 month for power sector. After issuing
letter of assurance they have to enter FSA and then FSA would be
completed within three months. For allocation they have to deposit
‘’Earnest Money Deposit’’. If EMD failure occurs, then 5% of the
value is kept.

(7) Letter of assurance for new consumers:

New consumers from state, central power utilities, CPPS,
Independent power producer, fertilizer LOA, are based on prevailing
norms and recommendation of administrative ministry.
All other consumers may be issued LOA by CIL. LOA will be
issued by CIL to the applicant consumers consequent upon payment
of EMD to the coal company. The amount of EMD could be initially
issued at 5% value of annual coal requirement. However, CIL may
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 decide a different level, based on various facts the approval of board
of directors. Loading will be valid for a period of 12 to 24month as
applicable and if after paying buyers reject the order then that
amount will be forfeited.

(8) E-auction of Coal

Coal distribution through e-auction was introduced with a view to
provide access to coal for such consumers who are not able to source
coal through the available institutional mechanisms for reasons like the
seasonality of coal requirement, limited requirement of coal not
warranting long term linkage etc. In long run, it is expected that e-
auction may help in aerating spot as well as future market of coal in the
country so there is some fresh scheme of e-auction will be introduced.
a) Any buyer will be entitled to buy coal under auction.
b) Coal Company may be allowed to fix undisclosed reserve price
not below the notified price.
c) E- auction should be announced well in advanced and be given
wide publicity to all consumers who intend to participate.
d) In order to address the concern of such industrial consumers who
wish to have an assured supply over a long period, say one year
CIL will earmark a fixed quantity which will be provided to
highest bidder/ bidders as per bidders requirement during the
time of bidding

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FINDINGS

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After analyzing studying the whole aspect of Central Coalfield Ltd. when
engaged in the job training, I found the following.

As we know India is the third largest Coal producing country. It

contributes around 85% of coal production in India. It is the largest company
in the world in term of coal production. It employs nearly 425 lacs persons
and is the largest corporate employer in the country. Coal India Ltd. is one
of the largest companies in the country, turnover being around Rs. 38631
billion in 2007-08. It is one of the largest tax payers (corporate tax Rs. 35.7
billion) in 2007-08.

From the above, I analyzed that Coal India Ltd. provides positive
economic condition to the country. Firstly according to me, it employee lacs
of people. It feels proud for the country people as it produces 85% Coal by
which many company depend for its production. One of the most important
things about the Coal India that in our country the highest percentage of
power produce by Coal, if there is no Coal we can’t imagine about
electricity. We have to depend on thermal electricity and for depend on other
electricity as it paid 35.7 billion tax to the government. The money is used in

53 | P a g e
many services like hospital, school, and man. As it provide many facility to
their employees like medical facility, school facility, home to live electricity,
water and many stall service etc. I also found that the present sales and
distribution system which is also known as linkage system is very much
effective rather than the previous sales system which was fuel agreement
system.

CONCLUSION

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After analyzing above the company I come to the following conclusion
which is as follow: first it is very interesting to know that this company is
the third largest coal producing country. It gives opportunities to 4.25 lacs
employee and their needing facility.

It also contributes in shaping the country by paying tax. The profit is

also good but the profit is not shown of maximum. As want to say
something about the price release for the coal to buyers. Per tone price is
very cheap and the buyers release the products at maximum price. It is
very good because if company releases at highest price then the coal
related products like electricity price is more. It is very good aspect that is
under the Government of India, if it is under the private sector then he
creates monopoly in the country. The Coal distribution Policy is very
effective and auction is very interesting for the buyers. The company also
takes positive decision that it not involves in service to the buyers like
transport, material handling, and logistics supply chain etc. company gives
time to receive the coal within 45 days.

55 | P a g e
 And at last I want to say that this company received award of Mini
Ratna and step toward Nav Ratna.

BIBLIOGRAPHY
http://ccl.gov.in/biz/sales_market.htm

http://www.coalindia.in/ContactUs.aspx?tab=2

http://coal.nic.in/

http://ccl.gov.in/

http://www.bccl.cmpdi.co.in/OB Sales&Mkt.htm

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