Of Coal By Coal India Limited (B.C.C.L)

SUBMITTED BY AMRITRAJ MBA-(2009-2011) Enrollment No. : A30101909149





This is to certify that Mr. Amrit Raj , a student of Post Graduate Degree in Management, Amity Global Business School, Noida has worked in the BHRAT COKING COAL LIMITED., under the able guidance and supervision of M.Chandra CGM of B.C.C.L The period for which he was on training was for 8 weeks, starting from 07/06/2010 to 30/07/2010.This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in International Business. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

Signature (Faculty Guide)

Signature (Student)

I express my sincere gratitude to my industry guide Mr, M Chandra Sir , CGM of B.C.C.L , for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible. I would also like to thank the entire team of B.C.C.L , for the constant support and help in the successful completion of my project. Also, I am thankful to my faculty guide Ms. Kamal Deep Kaur of my institute , for her continued guidance and invaluable encouragement.

AmritRaj Enrollment no A30101909149

Table of content

1) Executive summary 2) Introduction a)Types of coal b) production of coal in other parts of world c) Objective d)Gradation of coal 3) Research methodology a) Research objective b) Business research desgin c) Research Plan 4) Industry profile a) review of literature b) History c)About CIL d) Major companies e)SWOT Analysis 5) Company Profile a) History of B.C.C.L b) organization chart c) International Cooperation d) Performance Graph

e) SWOT Analysis 6) Issue and challenges faced by organization 7) Findings of the project 8) Recommendation 9)Bibliography .

The benefits of low ash coal burning in boilers are realised but reimbursement of extra cost of beneficiation for washed non-coking coal needs to be considered. tone during 1990-91. Besides the above coking coal washeries. appear to be bright as. Planning Commission has taken the decision that non-coking coal meant for Thermal Power Plants situated far away from feeding coalfield. Present washeries face problems in optimum production more on quality aspects than on quantity and it appears that trend of using imported coking coal of low ash to blend with indigenous high ash coal for steel sector requirement. should be beneficiated. Production of clean coal in these washeries during 1989-90 was 12 million tonne and it is expected to go upto 14 million. may continue for some time to come on considerations of optimised steel production.coking coal beneficiation. Bina deshaling and Piparwar beneficiation plants are in preliminary stages of construction in non-coking coal sector. There are 2 washeries under construction now and these are expected to be completed by 1995.EXECUTIVE SUMMARY Topic : pricing and distribution of coal INDUSTRY OVERVIEW There are 21 coking coal washeries in production both in private and public sectors. . in view of sharp rise in demand for coal. Future prospects of washeries for non. there is increasing trend in mechanised mining of inferior seams resulting in deterioration in quality and consequent reluctance by consumers to accept the same.

Major consumer of coal are public sector undertakings like y Thermal power station y Bricks industries y Agriculture y Steel industries y Cement y power .  o A number of pricing challenges were found .The highlights of the outcomes from this study are:  o The major role CIL is the price fixation of the coal according to their grade to achieve business results. These include Government rules and international market competition.



a fossil fuel. The wide shallow seas of the Carboniferous period provided such conditions. oxygen and nitrogen. hydrogen. Over time. Coal is composed primarily of carbon along with variable quantities of other elements. the chemical and physical properties of the plant remains (believed to mainly have been fern-like species antedating more modern plant and tree species) were changed by geological action to create a solid material. either underground or in open pits. Coal begins as layers of plant matter accumulate at the bottom of a body of water. Gross carbon dioxide emissions from coal usage are slightly more than those from petroleum and about double the amount from natural gas. The harder forms. Coal. chiefly sulphur. . can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. usually by mud or acidic water. For the process to continue the plant matter must be protected from biodegradation and oxidization. such as anthracite coal. as well as one of the largest worldwide anthropogenic sources of carbon dioxide emissions. is the largest source of energy for the generation of electricity worldwide.[1] Coal is extracted from the ground by mining. This trapped atmospheric carbon in the ground in immense peat bogs that eventually were covered over and deeply buried by sediments under which they metamorphosed into coal.INTRODUCTION ABOUT COAL Coal is a readily combustible black or brownish-black sedimentary rock normally occurring in rock strata in layers or veins called coal beds.

In its dehydrated form. under suitable conditions it is transformed successively into y Peat. also referred to as brown coal. Additionally. it is an important source of light aromatic hydrocarbons for the . considered to be a precursor of coal. Jet is a compact form of lignite that is sometimes polished and has been used as an ornamental stone since the Iron Age y Sub-bituminous coal.Types Believed approximate position of the proto-continents toward the end of the Carboniferous period. Ireland and Finland. peat is a highly effective absorbent for fuel and oil spills on land and water y Lignite. the light blue represents shallow seas where many of today's coal deposits are found. is the lowest rank of coal and used almost exclusively as fuel for electric power generation. has industrial importance as a fuel in some regions. As geological processes apply pressure to dead biotic material over time. for example. whose properties range from those of lignite to those of bituminous coal are used primarily as fuel for steam-electric power generation. as opposed to deeper waters which gave rise to oil-bearing rocks derived from marine species.

[2] Small steam coal (dry small steam nuts or DSSN) was used as a fuel for domestic water heating y Anthracite. . the highest rank. It may be divided further into metamorphically altered bituminous coal and petrified oil.chemical synthesis industry. as a lubricant. black but sometimes dark brown.S. y Bituminous coal. used primarily as fuel in steam-electric power generation. glossy. when powdered. often with well-defined bands of bright and dull material. technically the highest rank. as from the deposits in Pennsylvania y Graphite. but difficult to ignite and is not so commonly used as fuel: it is mostly used in pencils and. with substantial quantities also used for heat and power applications in manufacturing and to make coke y Steam coal is a grade between bituminous coal and anthracite. black coal used primarily for residential and commercial space heating. dense mineral. a harder. once widely used as a fuel for steam locomotives. In this specialized use it is sometimes known as seacoal in the U.

Brown coal is found in Victoria and South Australia.. In fiscal year 2008/09.5 million tonnes of coal was mined. and 193. FORMS OF COAL IN AUSTRAILIA Two forms of coal are mined in Australia. In 2000/01. mostly to eastern Asia. 258. 487 million tonnes of coal was mined. sea level rise and the effects of global warming on Australia. based on 2004 GHG inventory. and 261 million tonnes exported.PRODUCTION OF COAL IN OTHER PARTS OF WORLD Coal in Australia Coal in Australia is mined in every state and territory of the country. depending on the region: high quality black coal and lower quality brown coal. Coal mining in Australia is controversial because of the burning of exported and imported coal which contributes to climate change. Black coal is found in Queensland and New South Wales. 75% of the coal mined in Australia is exported. or export shipping terminals. The burning of coal produces 42. It is used to generate electricity and is exported.6 million tonnes exported. It is generally mined underground before being transported by rail to power stations. not counting export coal. Australia is the world's leading coal exporter. Coal also provides about 85% of Australia's electricity production. Black coal was also once exported to other Australian states for power generation and industrial boilers. global warming. and is used for both domestic power generation and for export overseas. and is of lower quality due a higher ash .1% of Australia's greenhouse gas emissions.

Australia is the world's 4th largest coal producer. Australia¶s coal industry is dominated by BHP Billiton. Australia had end 2007 coal reserves of 76600 million tonnes. Russia. 1. Indonesia and South Africa. India.and water content. produced 393. Today there are three open cut brown coal mines in Victoria used for baseload power generation Overview Australia had 2009 coal production of 409. As a result Victoria adopted German power station and briquette technology in the 1920s to utilize the brown coal reserves of the Latrobe Valley. Japan is the destination for over 60 per cent of Australia¶s coal export. According to the 2008 BP Statistical Energy Survey. Australia exported 340. according to the 2008 BP Statistical Energy Survey. 98% of Australia¶s export production coal deposits are located in Permian age sediments (250 million years old) in the Bowen Basin in Queensland and the Hunter Valley basins in New South Wales. Western Australia has some producing mines south of Perth. Australia. and Xstrata (Switzerland).92 million tonnes of coal in 2007.13 million tonnes oil equivalent.79 million tonnes of coal in 2007. located in Victoria. and.03% of the world total and consumed 53. the USA. Coal is Australia's major mineral export and accounts for nearly 25% of Australia's export earnings. Australia also has reserves of lower grade lignite coal. 9. .55% of the world total.22 million tonnes.68% of the world total. Australia had 2009 coal consumption of 50. Anglo American (UK). Rio Tinto (Australia-UK). 6. Australia is also the world¶s largest net exporter of coking and steaming coal. Coal is exported from nine terminals at seven ports along the east coast. The world's major producers are China.82 million tonnes oil equivalent.

According to the 2008 BP Statistical Energy Survey. Coal only provides 10% of Canada¶s energy requirements. according to the 2008 BP Statistical Energy Survey. while consuming 30.99 trillion kilowatt- .95 trillion kilowatt-hours per year. Nearly 90% of Canada¶s coal consumption is used for power generation. Canada is a major coal producer and consumer. Currently over half of Canada¶s coal production is bituminous. 1. with the remainder used in steelmaking.7% of its electricity from coal as of 2006 (compared to 1. or 68. with. primarily as metallurgical coal. both as a mining industry and as an energy provider. Canada had 2007 coal production of 69.36 million tonnes. British Colombia and Saskatchewan. Close to one half of Canada¶s coal production is exported.BHP Billiton is the world¶s largest supplier of seaborne traded hard coking coal from its predominantly open-cut mines at its low cost asset base in Queensland (owned in alliance with Mitsubishi Corporation) and New South Wales (100 per cent owned). Minor coal is produced along the east coast provinces of New Brunswick and Nova Scotia. generating 1. The main coal producing regions are in Alberta (nearly 50%). end 2007 coal reserves of 6578 million tonnes.42 million tonnes oil equivalent.17% of the world total. with sub bituminous and lignite the rest. Coal power in China The People's Republic of China is the largest consumer of coal in the world and is about to become the largest user of coal-derived electricity. COAL IN CANADA The Canadian coal industry plays an important role in the Canadian economy.

compared to 30 per year for coal power in the United states Coal production rose 8.7% of China's electricity needs in 2006. it is third in the world in terms of total coal reserves behind the United States and Russia.1% in 2006 over the previous year. . Most reserves are located in the north and north-west of the country. which poses a large logistical problem for supplying electricity to the more heavily populated coastal areas Coal power is managed by the State Power Grid Corporation. While China boasts the greatest use of coal power. China's coal mining industry is the deadliest in the world and has the world's worst safety record where an average of 13 people die every day in the coal pits. Hydroelectric power supplied another 20.38 billion tons. or 49% for the US). and the nation's largest coal enterprises saw their profits exceed 67 billion yuan. China has enough coal to sustain its economic growth for a century or more even though demand is currently outpacing production. With approximately 13 percent of the world's proven reserves. reaching 2. or $8.75 billion .hours per year.

These have comparatively less coking properties than coking coal Mainly used as blend-able coal in steel making. when heated in the absence of air. form coherent beads.OBJECTIVE : Pricing and distribution policy of CIL (B. when heated in the absence of air. free from volatiles. this coal is not acceptable for washing in washeries.C. Such coals are blended with coking coal in adequate proportion to make coke. called coke. merchant coke manufacturing and other metallurgical industries NLW COKING COAL : This coal is not used in metallurgical industries. These have coking properties Mainly used in steel making and metallurgical industries Also used for hard coke manufacturing SEMI COKING COAL : These coals.L) Pricing policy Pricing policy of coal is mainly based on the categories of coal or quality of coal produced. Because of higher ash content. form coherent beads not strong enough to be directly fed into the blast furnace. with strong and porous mass. COKING COAL : These coals.C. This coal is used for power utilities and non-core sector consumers. Categories of coal given. .

COKING COAL Grade Steel I Steel II Washery I Washery II Washery III Parameter Ash not exceeding 15% Ash exceeding 15% but not exceeding 18 % Ash exceeding 18% but not exceeding 21 % Ash exceeding 21% but not exceeding 24 % Ash exceeding 24% but not exceeding 28 % . and for other heating purposes HARD COAL : Hard coke is formed from coking / semi-coking coal through the process of carbonisation. chemical and brick manufacturing.NON-COKING COAL : These are coals without coking properties. resulting in value addition of coal due to reduction in ash percentage. glass. fertilizer. Used in manufacturing of hard coke for steel making Beneficiated and washed non-coking coal is used mainly for power generation Beneficiated non-coking coal is used by cement. sponge iron and other industrial plants GRADATION OF COAL A. Mainly used in metallurgical industries Also used in industrial plants utilising furnaces WASHED AND BENEFICIATED COAL : These coals have undergone the process of coal washing or coal beneficiation. ceramic. Mainly used as thermal grade coal for power generation Also used for cement. paper.

NON-COKING COAL Grade A B C D E F G UHV RANGE (KCALS/KG) Exceeding 6200 Exceeding 5600 but not exceeding 6200 Exceeding 4940 but not exceeding 5600 Exceeding 4200 but not exceeding 4940 Exceeding 3360 but not exceeding 4200 Exceeding 2400 but not exceeding 3360 Exceeding 1300 but not exceeding 2400 D.Washery IV Ash exceeding 28% but not exceeding 35 % B. SEMI COKING COAL Grade Parameter Semi Coking I Ash + moisture not exceeding 19 % Semi Coking II Ash + moisture exceeding 19 % but not exceeding 24 % C. HARD COKE Grade Ash % By Product Premium By Product Ordinary Beehive Premium Beehive Superior Beehive Ordinary Not exceeding 25 % Exceeding 25 % but not exceeding 30 % Not exceeding 27 % Exceeding 27 % but not exceeding 31 % Exceeding 31 % but not exceeding 36 % .

low ash % Assam and Ranigunj coal Coking and semi-coking coal Semi-coking and non-coking coal. direct feed and washed.E. etc -coking coal. middlings of coking coal washeries. hotels. domestic use. middling & rejects of washeries Special Smokeless Fuel (SSF) Power sector Semi-coking coal of Coking Index 8 10 Non-coking coal. middlings of coking coal washeries Long Flame non-coking coal Hard coke Non-coking coal Non-coking coal middlings of coking coal washeries Superior grades of non-coking coal Non-coking coal . HARD COKE Industry Steel making Cokeries / coke oven plants Briquette making / domestic fuel making Type of Coal Required Coking and semi-coking coal. washed coal of non-coking coal washeries Cement sector Glass and potteries Cast iron castings Steel castings Bricks Old boilers Halwais. blendable coal.

forwarded e-auction Objective: Coal distribution through e-Auction has been introduced with a view toprovide access to coal for such buyers who are not able to source coal through theavailable institutional mechanism. The purpose of e-Auction is to provide equal opportunity to purchasecoal through single window service to all intending Buyers. E . transparent and consumer friendly system of marketingand distribution of coal.the e-auction is classified into two categories i. spot e-auction 2. Terms & Conditions With reference to para VI (4) of the µe-Auction Scheme 2007¶ for Spote-Auction the .:1.DISTRIBUTION POLICY Distribution of coal is done with the help of y y y E-Auction By Road Railways E-Auction Some of the small sector company purchase the coal by e-auction.e.Auction has been introduced to facilitate across the country wideranging access to book coal on-line for all sections of coal Buyers enabling them to buy coal through a simple. In the long run it is expected that e-Auction mayhelp in creating spot as well as future market of coal in the country.

etc. a prospective Buyer shall berequired to get itself / himself registered with the Service Provider appointed by the CIL / Coal Companies for the purpose. SSI Registration. by submitting an application in the prescribed format available on the Website of the respective Service Providers. 2. PAN Number. The ³Unique registration number´ of the registered bidders shall be communicated to the Coal Companies by the . 2. Passport size photograph.2 After the registration. The application shall be made along with the required documents such as copy of Income Tax return(latest).3 The service provider shall issue ³Photo Identity Card´ to their registered bidders duly authenticating the identity & signature. partnership firm. if applicable.1 Before participation in the e-Auction. Registration: 2. or at any of the front officesof the service provider. Sales Tax / Vat Registration Certificate. Registration can be done either online. Eligibility: Any Indian Buyer (viz.Trade License. individual. Details of the registration process with the service provider will be available in theirrespective websites.) canparticipate in eAuction for procurement of coal. 2. all-prospective Buyers will have an auto generated ³Unique User ID´ & a ³password´ based on which they can log in. as prescribed by the service provider.detailed terms and conditions are given below : 1. indicating a ³Unique Registration Number´ allotted to them. companies etc.

the details of valid sales tax registration will be indicated in each µPhoto Identity Card¶. with the Service Provider.through display on the Company¶s notice board and putting the same on the CoalCompany¶s websites for wide publicity. 2.The minimum quantity for bidding would be 50 (fifty) tonnes for a source for Road mode. 3. where as in case of Rail the minimum quantity for bidding would be 1 (one)rake. The rake size shall be as per prevalent Railway Rules.based on more than one independent valid sales tax registration. The quantity of coal ina rake shall . 3.2 There will be separate auction for dispatches by rail and road mode.4Only one registration will be done against one PAN number. minimum 7(seven) days in advance. However. Notification: 3. This EMD shall not be specific for a particular Subsidiary Coal Company and shall be available with the Service Provider for participation in the e-Auction across the Subsidiary Coal Companies of CIL.service provider. 2.1 Coal companies would draw program for conducting at least two e-Auctions per month and notify the same.200/.5 All Buyers having been registered with the service providers shall also have tofurnish non-interest bearing Earnest Money Deposit (EMD) at the rate of Rs. with the Service Provider. as long as the required amount of EMD is available in the bidders a/c. more than one registration against a PAN Number can be considered. In such cases. The program will be intimated to the Service providers accordingly for hoisting the same on their websites also.per tonne.

be as indicated in the notice of E-auction. 3.3 The Buyer should satisfy itself / himself about the Rake fit stations /destinations from the Railways before participation in e-Auction by rail, Non acceptance of the programme, even after the option exercised under extant Railway rules, on account of rake-fit stations / destinations being not accepted by the Railways shall be treated as a failure of the Buyer leading to forfeiture of relatable EMD.
4. Bidding Process

4.1 The registered Bidders shall be required to record their acceptanceafter login, of the Terms & Conditions of the e-Auction before participation in theactual Bidding Process. 4.2 Before participating in e-Auction, bidders are to satisfy themselves with the quality of coal being offered from a source. 4.3 Prospective Bidders are entitled to Bid for the quantity to the extent of amount of EMD for which is available with the service provider in the bidder¶s account at the time of bidding. 4.4 The Buyers while bidding shall quote their ³Bid price´ per tonne in Indian Rupee as base coal price on FOR/FOB colliery basis, exclusive of other charges like statutory levies, surface transportation charges, sizing/beneficiation charges, taxes, cess, royalty, SED, & any other charges as will be applicable at the time of delivery. These charges as well as freight etc. shall be on the Buyer¶s account. 4.5 The bidder has to bid for a price equal to or above the reserve price tosecure consideration in the concerned e-Auction.

4.6 The date, time and period of e-Auction as notified in advance including closing time on portal of service provider shall be adhered to but for the event offorce majeure. However, the closing time of e-Auction will be automatically extended up to last Bid time, plus 5 minutes, so that opportunity is given to other Bidders for making an improved Bid on that item. 4.7 The Bidder shall offer his Bid price (per tonne) in the increment of 10/- (Rupees ten) during the Normal e-Auction period. During the extendedperiod of first two (2) hours, the Bidder shall offer his Bid price in the increment of Rs.20/-. Beyond this extended period of two hours the bid price increment would be Rs. 50/- (Rs.Fifty ) only. 4.8 While maintaining the secrecy of Bidder¶s identity, the web site shall register and display on screen the lowest successful Bid price at that point of time.The system will not allow a Bidder to Bid in excess of his entitled quantity as per his EMD. However once a Bidder is out-bided by another (in part or full) the particular Bidder shall become eligible for making an improved Bid. 4.9 Following criteria would be adopted in deciding the successful bidders:(a) Precedence will be accorded to the highest bid price in the descending order (H1, H2, H3 and so on) as long as the offered quantity is available for allocation. (b) If two or more buyers bid the same highest price, precedence for allotment (c) will be accorded to the buyer who has placed the bid for the higher quantity. (d) In case two or more buyers bid the same price and the same quantity,precedence will be given to the buyer who has accorded his bid first

with reference to time.

5. Post e-Auction process:

5.1 Each successful bidder will be intimated through e-mail / SMS by the Service Provider on the same date after the closure of e-Auction. However, it will be the responsibility of the bidder to personally see and download the result displayed on website, on the same date after close of e-Auction. 5.2 The successful bidders after the e-Auction, will be required to deposit coal value with the concerned coal company, within a period of seven working days,after the date of closing of e-Auction. Seven working days would be reckoned as applicable to the respective Subsidiary Coal companies¶ office where the payment/deposit is required to be made. 5.3 Equivalent amount of EMD of successful bidder corresponding to successful bid quantity, shall be blocked and will be transferred to Coal Company by the service provider along-with the bid sheet in respect of successful bidders.
6. Terms of payment:

6.1 The coal value to be deposited in advance by the successful bidders shall be computed and deposited after making provision for the EMD amount for the successful bid quantity already transferred by the service provider to the subsidiary company. In other words, the coal value to be deposited and EMD amount together, shall be equivalent to the 100 % coal value. 6.2 EMD amount shall not be treated as an adjustment towards the coal value but

would stand converted into a µSecurity Deposit¶ for performance of the bidders towards completion of the said transaction. 6.3 The above security deposit (as converted from the EMD amount) would be adjusted as coal value, only after completion of lifting of coal covered under coal value paid, excluding security deposit. However, in the event of default in performance by the bidder, the provision of forfeiture of the µSecurity Deposit¶ (asconverted from the EMD) as stipulated, would be applicable.6.4 In case of road supplies, once the coal value is deposited by way of demand draft /pay order, drawn in favour of the concerned coal company, along-with the debit advice issued by the bank, certifying that the DD/pay order has been issued, by debiting the account of the concerned Buyer, Sale/Delivery orders shall be issued within seven days by the coal company after encashment of buyer¶s financial instrument.In case of successful bidders, if the coal value is deposited for less than the allotted Quantity but not below 50% of the allotted quantity or, 50 tonne whichever is higher, the coal company shall accept the payment for the said amount and forfeit the EMD for the failed quantity. However if the buyer fails to deposit the coal value for at least 50% of the allotted quantity or 50 tonnes whichever is higher then the entire EMD of the allotted quantity shall be forfeited. 6.4 However, a successful bidder whose allotted quantity is only 50 tonnes will be

allowed to deposit coal value for minimum 90% i.e 45 tonnes within the stipulated period of 7 days without which the amount shall not be accepted. In such event they shall be permitted to deposit the balance fractional amount,

6.8 The Buyers shall also have the option of e-Payment once the system in the 1. at least three working days in advance before the expected date of offer to the Railways for allotment. will be displayed on the notice board of the coal company. within the subsequent period of 3(three)working days. The Buyer will be accordingly required to deposit DD/Pay Order along with the debit advice to the tune of BG involved in the programme.6 In case of Buyers who have booked their rail programme through BG. In spite of this. the consent given against rake programme will bewithdrawn by the coal company and EMD as per e-Auction scheme will be forfeited.9 Coal companies is suitably developed & the same is notified on the websites to 10% of the total coal value of 50 tonne. issued by the bank certifying that the DD/pay order has been issued by debiting the account of the concerned Buyer. within 48 hours of such notice. 6. there shall be two options available. the bidder at his option can deposit 100 % BG on the prescribed format from the buyers own account or else may deposit 100% amount through demand draft /pay order. . EMD for entire 50 tonne shall be forfeited.While submitting program. 1. drawn in favour of the concerned coal company.In the event of nondeposition of 100% coal value by the Bidder in terms of Clause-6. a notice for deposition of coal value by way of DD/Pay order.5 In case of rail borne supplies.7 above.along with the debit advice. if they fail to deposit full coal value of 50 tonne(minimum bid quantity).

The . 2) The quantity allotted against each rake is indicative quantity only and delivery shall be made on the basis of actual weighment by the Seller at the loading end. but to avoid any complaint regarding over-loading.By Road: 1) Coal company shall issue Sale / Delivery Orders to the successful bidders in terms of Clause 6. By Rail: 1) The seniority of buyers in case of rail borne supplies shall be guided by the seniority list as provided by the service provider based on buyer¶s bids. 3) The validity period for seeking allotment of rake in case of rail supplies shall be 45 days from the date of issue of consent by the coal company. Once the rake is allotted it shall remain valid for supply of coal as per prevailing Railway Rules. the Buyer himself or his authorized representative may supervise loading at the loading point. No extension of validity will be allowed in any case. However. The Buyer has to submit the option before the issue of the Sale / Delivery Order for movement of the coal ³within state´ or ³outside state´ and the Sale / Delivery Order would indicate the Same accordingly. the challan issued by the Coal Company shall indicate the destination. under loading and quality. 4) Although loading will be the responsibility of the coal company.4 after realisation of payment. 2) The validity period to complete lifting of coal by road shall be 45 days from the date of issue of Sale/Delivery Order.

.authorized representative must carry valid authority letter along with photocopy of Identity Card issued by Service Provider.


To have the brief idea over fluctuation of price of coal. As a part of exploratory research. Primary Data: The primary data which have been used here is collect with the help interaction with CGM of marketing and sales department . primary data has been collected and for the descriptive purpose secondary data has been collected. DATA: The data which have been collected for this research purpose are taken from the market in the form of primary data and secondary data. a. linkage.RESEARCH OBJECTIVE: y y y To find out pricing policy of coal done by CIL market. Both these types of data have been used for the study of derivative market and its knowledge in the minds of the investors. To know about the distribution methods of coal BUSINESS RESEARCH DESIGN: Descriptive Research Design is the design followed in the study. roadsales .

STASTICAL ANALYSIS: Data analysis is done with the help of bar charts. Secondary Data: The secondary data have been collected through available documents like articles on derivative.b. news paper and websites. . RESEARCH PLAN: Research plan for this study was to follow the collected information from the CGM of various department and they told how they their plan works .


During the financial year 2000-2001. West Bengal. Bharat Coking Coal Limited. (CIL). and these can be mined cheaply. Central Coalfields Limited. the company was under scrutiny by the Indian government for its performance and business practices. Mahanadi Coalfields Limited. The company is engaged in the mining of coal and coal based products. In 1999. It operates through eight wholly owned subsidiaries namely. However. like many state-owned concerns. India Coal India Ltd. India s per capita energy consumption is among the lowest in the world. At the start of the new millennium. Central Mine Planning and Design Institute Limited. production was 256. Western Coalfields Limited. CIL s financial performance has been generally poor. although the coal is generally of poor quality and has a high ash content. The company is headquartered in Kolkata. In 1998. India s total coal reserves were . India has vast coal reserves.6 million tons the previous year. and Northern Coalfields Limited. South Eastern Coalfields Limited. CIL is the largest company in the world in terms of coal production. is wholly owned by the Government of India through the Department of Coal and the Ministry of Mines and Minerals. it is also engaged in providing mining consultancy services across India and abroad.400-crore a crore is equal to 10 million. Coal provides more than 67 percent of India s energy requirements. CIL is responsible for 88 percent of coal output in India. Singrauli.5 million tons of raw coal. Further. CIL reported a loss of Rs 1. up from 250.Review of literature on Coal India limited Coal India Limited (CIL) is one of the largest coal producers in India. a holding company. Eastern Coalfields Limited. However.

which led the country to take up a close scrutiny of its energy options. which suggested the amalgamation of small and fragmented producing units.estimated at 200 billion tons. Orissa. much-needed investment for growth of this sector was not forthcoming from the private sector. Thus the idea of a nationalised. unified coal sector was born. unhealthy mining practices and sole motive of profiteering. and suffered from their lack of interest in scientific methods. Factors leading to the nationalisation of Indian coal industry Nationalisation of the Indian coal industry in the early 1970s was a fall-out of two events. In 1951 a Working Party for the coal industry was set up. After the Indian independence. The miners lived in sub-standard conditions as well. The objective of nationalisation was the conservation of the scarce coal resource. and its performance and operations very much reflect the policies and priorities of the government of India. 1n 1956. . of which over 69 billion tons were proven reserves. The first was the oil price shock. Due to the structure of the coal mining industry in India. In the pre-nationalised era coal mining was controlled by private owners. A Fuel Policy Committee set up for this purpose identified coal as the primary source of commercial energy. a greater need for coal production was felt in the First Five Year Plan. Secondly. The bulk of India s coal reserves are in the states of Bengal. History of CIL The Indian energy sector is largely dependent on coal as the prime source of energy. the National Coal Development Corporation (NCDC) was formed with 11 collieries with the task of exploring new coalfields and expediting development of new coal mines. and Madhya Pradesh. CIL s role is a major one. Bihar.

SECL. in the context of safety. WCL accorded Mini Ratna status 2000 : De-regulation of coal pricing and distribution 1992 : Mahanadi Coalfields Limited (MCL) formed out of SECL to manage the Talcher and IB Valley Coalfields in Orissa 1985 : Northern Coalfields Limited (NCL) and South Eastern Coalfields Limited (SECL) carved out of CCL and WCL 1975 : Coal India Limited formed as a holding company with 5 subsidiaries: Bharat Coking Coal Limited (BCCL).particularly coking coal. selective and slaughter mining. MCL. 1975. Bharat Coking Coal Limited (BCCL) was thus born. Coal Mines Authority Limited (CMAL) was formed in 1973. Western Coalfields Limited (WCL). Central Coalfields Limited (CCL). leading to the formation of a formal holding company . Eastern Coalfields Limited (ECL) and Central Mine Planning and Design Institute Limited (CMPDIL). Timeline 2008 : Coal India accorded Navratna status 2007 : Coal India and four of its subsidiaries NCL. conservation and scientific development. Planned development of available coal resources Improvement in safety standards Ensuring adequate investment for optimal utilisation consistent with growth needs Improving the quality of life of the workforce Subsequently. Following the state takeover of non-coking coal mines. . in India by: y y y y y Stopping wasteful.Coal India Limited on November 1. 1971 and nationalised them on May 1. 1972. the Government of India took over all coking coal mines on October 16.

capacity up to 38. a holding company. and it has made profits in only two years since its creation in 1975. Tagore & Company takes over Ranigunj Coal Mines 1815 .1820 : First Shaft Mine opened at Ranigunj 1774 : Warren Hastings initiates commercial coal mining at Ranigunj (West Bengal) ABOUT COAL INDIA LIMITED Coal India Limited (CIL). This comprised almost 88% of the coal output in India. up from 172 million tons the previous year. is first Joint Stock Coal Company in India 1835 : Carr. During .1973 : Non-coking coal nationalised. like many state-owned concerns. Coal Mines Authority Limited (CMAL) set up to manage these mines. However. river transportation used to transport coal to Calcutta.4 million tonnes Early 1900s : Capacity at 6 million tonnes per annum Upto 1900 : Minimal development. is a state-owned mining corporation and the largest coal producer in India. production was 179 million tons of hard coal. In 1990. railway lines at Calcutta leads to expansion of coal production 1843 : Bengal Coal Company takes over Ranigunj Coal Mines and others. CIL s financial performance has been generally poor. Bharat Coking Coal Limited (BCCL) formed to manage operations of all coking coal mines of Jharia Coalfield 1956 : National Coal Development Corporation (NCDC) formed to explore and expand coal mining in the Public Sector 1955-56 : Focus on coal industry. NCDC operations bought under the ambit of CMAL 1972 : Coking coal industry nationalised.

India s per capita energy consumption is among the lowest in the world. coking coal coal from which the volatile elements have been removed. India has vast coal reserves. it marked a decline from the previous financial year when it made a profit of Rs82 million. By 1900 there were 34 companies producing 7 million tons of coal from 286 mines. India s total coal reserves were estimated at 176 billion tons. In 1991. making it suitable as a fuel. when mining activity became commercial in conjunction with the expansion of the railway network. Demand continued to grow during World War II. within 200 meters of the coal pit or the workings. Of the total. The bulk of India s coal reserves are in the Bengal-Bihar coalfields in the west of the country. and production reached 29 million tons by 1945. and the . The monopoly interests of the British East India Company were revoked in 1813. and for metallurgical purposes comprises 24 billion tons (11 billion tons proven). By then. and its performance and operations very much reflect the policies and priorities of the government of India. of which over 30 billion tons are proven reserves. CIL s role is a major one. although the coal is generally of poor quality and has a high ash content. Initially.the financial year 1989-1990 CIL made a loss of Rs230 million. Due to the structure of the coal mining industry in India. Although this loss was less severe than those made in the period immediately after nationalization. especially during World War I. Coal provides more than 50% of India s energy requirements. the coal fields were operated by a large number of Indian private companies which possessed captive or company-owned coalfields to support their iron and steel works. The Indian coal industry has its origins in the early 19th century. particularly in the west of the country. and these can be mined cheaply. the number of companies had increased to 307. Production continued to grow in the first half of the 20th century. However.

the National Coal Development Corporation (NCDC) was formed. At the national level. government economic planners were convinced that the private sector would be unable to meet this target. as well as the period 1966-1969. total coal production in the country was 72 million tons. despite the increase in production. and the industry had been passing through cycles of shortages and surpluses which prevented effective planning for expansion and modernization. three factors emerged to force the government to consider the nationalization of the coal industry. during the Third Five Year Plan 1962-1966. Hence. India s ambitious economic development plans led to a tremendous demand for energy. There were over 900 . coal was targeted as the major source of power for industrialization. which took the old railway collieries as its nucleus and opened new mines as well. However. During the period 1971-1973. Under the government s Second Five Year Economic Development Plan 1957-1961. there was a fear that contemporary mining methods were leading to great wastage. However. At the time of the nationalizations. the government predicted that future demand for coal would be particularly heavy in view of its industrial development priorities. First. with the exception of NCDC and the Singareni Collieries. both in the public sector. During the 1960s. most of India s collieries continued to be operated by the private sector. Second.number of mines to 673. a target of 60 million tons was set for the end of the plan period. Finally. there was a shortfall in private capital investment in the industry. Production of coal increased from 38 million tons in 1956 to 56 million tons in 1961. The trend continued for almost a decade after India s independence in 1947. the government carried out a series of nationalizations of the privately owned coal companies in a major effort to increase production and overcome the shortage of coal. and in the absence of alternative sources.

Central Coalfields Limited at Ranchi. Western Coalfields Limited (WCL) at Nagpur. the government of Jammu and Kashmir collieries. Most of the production is the responsibility of the five subsidiaries of CIL. the Damodar Valley Corporation. and the Indian Iron & Steel Co. but the authority for framing broad policies and taking administrative decisions rests with CIL. In May 1973. with the exception of the Tata Iron and Steel Company. Coking coal mines. The Department of Coal was set up in the Ministry of Energy to oversee the public sector companies. were nationalized in May 1972. located at Dhanbad. and methods of mining were obsolete. some of which were producing only a few thousand tons of coal a month. . Eastern Coalfields Limited (ECL) at Sanctoria. in November 1975. and North Eastern Coalfields Limited (NECL) at Margherita. the sixth is the Central Planning & Design Institute at Ranchi. but there are four other coal producers in the public sector: the Singareni Collieries Limited. All the subsidiaries of CIL have the status of independent companies. CIL has six subsidiaries. the non-coking coal mines were also nationalized and brought under the control of the Coal Mines Authority (CMA). Five of these are involved in production: BCCL. Bharat Coking Coal Limited (BCCL). Further reorganization of the industry led to the formation of Coal India Limited (CIL). and a new public sector company. was floated to manage them. Together with the Neyveli Lignite Corporation (NLC).mines in operation. CIL is operated directly by the Indian government through the Department of Coal in the Ministry of Energy. The present structure of the Indian coal industry is a reflection of the priorities placed by the government on coal as a source of fuel and energy in economic development. The reorganization involved placing the majority of the public sector coal companies under CIL. which also absorbed NCDC.

Ltd.9 billion. These last four concerns are responsible for about 10% of the output. BCCL made cumulative losses of Rs4. The latter of the Tata Iron and Steel Company. but after the initial increase in production. and has an annual turnover of between Rs.l. Similarly. technical inefficiencies. Some 2% of the total output of coal is provided by the captive mines company-owned mines which ensure coal supplies sector.7 billion. Their shares in the total production of coal vary from 25 % for the Central and Western Coalfields. New technology was introduced.l and Rsl. and problems of flooding in the western coal fields. This was the result of shortages of power and explosives. In 1988. in the same year the Neyveli Lignite Corporation Limited made a profit of Rs570 million on a turnover of Rsl. some rationalization took place in the sector. The financial performance of the subsidiaries varies. Each employs between 100. As a result of the nationalizations.000 people. BCCL made a loss of Rs900 million on a turnover of Rs5. labor unrest. and absenteeism. and 99 million tons in 1976. the only coal producer in the private . The mines were regrouped and reduced to 350 individual mines. output stagnated in the period 1976-1980.3 billion. excessive employment. Financially.6 billion over the same five year period. and about 20% for Bharat Coking Coal and Eastern Coalfields.5 billon over the five year period 1981-1986. Nationalization was intended to provide the basis for modernizing the coal industry.5 billion each. However. which resulted in considerable increases in production. The latter totaled 87 million tons in 1975.000 and 180. as well as fires in the vast Jharia coalfield. the subsidiaries of CIL have an average authorized capital of Rsl. CIL s share of total production was about 88%. Eastern Coalfields made cumulative losses of Rs3. and there was a shift from pick mining to blast mining.

This shortage was compounded by the poor quality of India s coking coal. a need was perceived to improve the coal handling facilities at India s major ports. and Canada. and was significantly more expensive than locally produced coal.2% per year. Total losses for the five year period were almost Rs6 billion. although actual production fell short at 148 million tons. The bulk of the imported coal came from the United States. Australia. These losses peaked at Rs2. Consequently. and came down even further to Rs337 million the year after. but came down to Rs882 million the following year. However. especially in the open-cast mines. since they were still cheaper than the imported coal.4 billion in 1978-1979. especially for industrial users. CIL S financial performance was poor during this period. Second. which has difficult washing characteristics and requires the coal preparation plants to run extremely complex processes. First. The result was that the country had to import coal from abroad.possesses the largest known coking coal reserves in the country and it has been estimated that ongoing fires since around 1931 have accounted for the loss of some 40 billion tons of coking coal. This situation had two implications. During the Sixth Five Year Plan. CIL made a profit for the only time in its history. the problems suffered by CIL in particular and the coal industry in general had led to considerable shortages. Targeted production for the end of the plan period 1984-1985 was for 165 million tons per annum.4 million tons of imported coal by the mid-1980s. coal production grew at 6. This was . Production picked up in 1980 when it finally exceeded 100 million tons. a trend that still persists. This need was reflected in the Sixth Five Year Plan. It suffered losses throughout the 1976-1981 period. when it was projected that the ports would have to handle at least 4. and increased to 115 million tons by 1983. it became feasible for CIL to adopt more expensive mining methods. During the first two years of the plan.

and 207 million tons in 1988-1989. Coal production in the year 1981-1982 was 125 million tons. Furthermore. and low productivity. The railways were no longer the primary source of demand for coal. to 684 by 1982. Part of the problem was the high cost of new equipment necessitating new investment. since targeted budgets were overrun. meant that targeted output was frequently revised downwards. The issue of pricing has always been a serious problem for the Indian coal industry and for CIL. The structure of demand for coal had changed. thereby negating some of the initial cost reduction benefits of reorganization. and thermal .largely due to the Indian government s increasing the price of coal in both February 1981 and May 1982. The pricing formula is based on an Indian industry-wide average with differentials for different grades. This practice may explain in part CIL s poor overall financial performance. Demand for coal was projected to reach 165 million tons by 1985. 230 million tons by 1990. and 155 million tons in 1984-1985. above the targeted figure. the number of mines. 1967-1974. Total production of coal and lignite was 146 million metric tons in 1983-1984. which had been reduced immediately following nationalization. 162 million tons in 1985-1986. but in practice the price is usually set below the industry s average cost. and over 400 million tons by the year 2000. demand now lay primarily with the steel plants. had again increased. poor quality. Rather. with the exception of a period of seven years. Coal prices have been administered by the government since 1941. other industrial units. 175 million tons in 1986-1987. 191 million tons in 1987-1988. CIL believed the output needed to increase by 25 million tons a year during the 1980s in order to keep up with demand. Despite the increase in production. such as cost-overruns. problems related to operations. Since coal was meeting over 70% of the energy requirements of Indian industry.

output for coal alone.power stations. excluding lignite. had reached 195 million tons. but it resulted in a steady deterioration of coal quality over time. Mining coal from shallow seams was financially sound. To satisfy this demand. new opportunities were created for international partnerships in the coal sector throughout the 1980s. The reliance on coal-fired thermal power plants for power generation led to a steady increase in the demand for coal throughout this period. The Seventh Five Year Plan of 1985 included some important changes introduced by CIL in the structure of its production. and by 1988-1989. CIL relied primarily on the expansion of open-pit mines. MAJOR COMPANIES Baharat coking coal ltd Central coalfield ltd Singareni Collieries company ltd Estern Coal field ltd . The plan had set a production target of 226 million tons for coal. As a result of the greater need for coal.

taken over by the Govt. 1972 to operate coking coal mines (214 Nos) operating in the Jharia & Raniganj Coalfields.Western Coal field ltd COAL INDIA LTD Mahananadi coalfield Ltd South Eastern Coal Field ltd North Eastern Coalfield ltd Northern Coal field ltd INTRODUCTION BHARAT COKING COAL LIMITED Bharat Coking Coal Limited (BCCL) is a subsidiary of Coal India Limited with its headquarters in Dhanbad. of India on 16th Oct. It was incorporated in January.1971 .

03. a network of aerial ropeways for transport of sand and nine coal washeries. 2003-04 and 200405 were Rs. 3 non-coking coal washeries. It was incorporated in January. Mohuda.13 crore. 507. taken over by the Govt.268 and as on 1.00 crore. Moonidih and Madhubhan.044. Overall scenario Bharat Coking Coal Limited is one of the consistently loss-making subsidiary company of Coal India Limited. Bhojudih. In addition to production of hard coke. and 5 bye-product coke plants. The company has made a turn around in the current fiscal year and has registered a profit of 1. the Company operates 78 coal mines which include 41 underground.4.901. The Company also runs 7 coking coal washeries. .66 crores during April to December 2005 The paid up capital of the company as on 31. 2. BCCL is the major producer of prime coking coal (raw and washed).02 crore as on 31. Dugda. The company has accumulated losses of Rs. 569. Barora. 7.118. The mines are grouped into 13 areas for administrative convenience.2005 is Rs. Bharat Coking Coal Limited (BCCL) is a subsidiary of Coal India Limited with its headquarters in Dhanbad.2005 The total manpower as on 1.85 crore and Rs. of India on 16th Oct. The losses incurred by the company during 2002-03. Sudamdih. BCCL operates a number of sand gathering plants.03.1.05 was 92. Medium coking coal is also produced in its mines in Mohuda and Barakar areas. 1972 to operate coking coal mines (214 Nos) operating in the Jharia & Raniganj Coalfields.Currently.06 was 88. 959. Patherdih. one Captive Power Plant (2x10 MW). Lodna. and Rs.43 crore respectively . 16 opencast & 21 mixed mines.1971. namely.

The main concessions include. engaged in mining activity. inter .Major consumer of coal industries percentage 3% 3% 4% 16% 1% middlings NCW/coal steel cement 72% 0. The government offers a wide range of concessions to investors in India.50% fertilizer brk&others cons power SWOT ANALYSIS OF CIL Strengths: 1.

y There is limited access to capital. There are long lead times on production decisions. Weakness: y Most of the Indian mining companies do not have access to Indian capital market y There is a lack of respect for the mining industry and it suffers from the incorrect perception that ore deposits are depleted. * One tenth of the expenditure on prospecting or extracting or production of certain minerals during five years ending with the first year of commercial production is allowed as a deduction from the total income. acquire. . energy saving equipment and certain other equipment eligible for 100 percent depreciation. * Environment protection equipment. develop and produce. and mines are increasingly more costly to find.alia: * Mining in specified backward districts is eligible for a complete tax holiday for a period of 5 years from commencement of production and a 30 percent tax holiday for 5 years thereafter. pollution control equipment.

a problem that promotes delays and inefficiency. Privatization of ports may bring the needed efficiencies and capacities. Threats: . freight trains get a lower priority than passenger trains.In India. The Opportunities y Considerable potential exists for setting up manufacturing units for value added products.y The Indian mining industry suffers from an out-dated. cut costs. There exists considerable opportunities for future discoveries of sub-surface deposits with the application of modern techniques. capacity addition by the Indian Railways is necessary to increase freight capacity from the coal producing regions to demand centers in the northern and central parts of the country. In addition. and increase the system's reliability. unattractive approach to mining education that is partly to blame for insufficient human resources. On the Indian rail network. Special freight corridors would raise speeds. the logistics infrastructure such as ports and railways are overburdened and costly and act as bottlenecks in development of free market. y y y Current economic mining practices are generally limited to depths of 300 meters and 25 percent of the reserves of the country are beyond this depth Strengthening of logistics in coal distribution .

y Large integrated international metal manufacturers including POSCO. Mittal Steel and Alcan have announced plans for expansion in India y Mining companies and equipment suppliers are under the constant threat of being taken over by foreign companies. y Stricter environment rules restricting mining activities . y Politicians undervalue the industry's contributions to the economy. y A heavy tax burden discourages further investment.

of India on 16th . 1972 to operate coking coal mines (214 Nos) operating in the Jharia & Raniganj Coalfields. It was incorporated in January.COMPANY PROFILE HISTORY OF B. taken over by the Govt.C.C.L Bharat Coking Coal Limited (BCCL) is a subsidiary of Coal India Limited with its headquarters in Dhanbad.

66 crores during April to December 2005 The paid up capital of the company as on 31. 2. The mines are grouped into 13 areas for administrative convenience. BCCL operates a number of sand gathering plants. Bharat Coking Coal Limited is one of the consistently loss-making subsidiary company of Coal India Limited. Currently.05 was 92.85 crore and Rs.00 crore. Bhojudih. namely.06 was 88.13 crore. the Company operates 78 coal mines which include 41 underground. The losses incurred by the company during 2002-03.2005 The total manpower as on 1.Oct.43 crore respectively . Moonidih and Madhubhan.03. Patherdih. Sudamdih.1971. 959.2005 is Rs. 569. and Rs. Barora. 16 opencast & 21 mixed mines. The company has accumulated losses of Rs. 507. 3 noncoking coal washeries.4.03.118. 7. The Company also runs 7 coking coal washeries. In addition to production of hard coke. The company has made a turn around in the current fiscal year and has registered a profit of 1.044.1. Mohuda. BCCL is the major producer of prime coking coal (raw and washed). ORGANIZATION CHART .02 crore as on 31. Dugda. 2003-04 and 200405 were Rs. one Captive PowerPlant (2x10 MW). and 5 bye-product coke plants. Lodna. Medium coking coal is also produced in its mines in Mohuda and Barakar areas.901.268 and as on 1. a network of aerial ropeways for transport of sand and nine coal washeries.



FOREIGN COLLABORATION To meet country's growing demand for coal foreign collaboration with the advanced coal producing countries are considered for: · Bringing in new technologies both in underground and opencast sectors for efficient management in the coal industry and skill development and training etc. Bilateral co-operation mode has been adopted for the introduction of PSLW mining at 3 mines in SECL. The latest policy pursued by CIL is to encourage technology up gradation through Global Tender. COOPERATION WITH CANADA The meeting of Indo-Canada Working Group on Coal was held in Canada during 24th 30th June. Bilateral co-operation. Bringing foreign financial assistance to meet the investment requirement. Indian delegation led by the then JS&FA and CMD. Global tender approach has been used towards introduction of high productivity Continuous Miners at SECL and WCL. Seeking bilateral funds for import of equipment. although limited. which are not manufactured in the country. 2003. ECL discussed overRajmahal Expansion Project of ECL during the meeting. COOPERATION WITH FRANCE . continues to play an important role for search of new technologies and process improvement.

of the India and U. identification of suitable projects as well as methods of funding. GDK-10 (Block B) and GDK-8 incline projects in SCL were taken up for introducing blasting gallery technology in collaboration with France. introduction of compatible technology for more efficient management in Indian Coal Industry and skill development etc. France has also assisted in the introduction of sub-level caving technology at East Katras mine of Bharat Coking Coal Limited. It has assisted India in introduction of blasting gallery method at East Katras (Bharat Coking Coal Limited) and Chora (Eastern Coalfields Limited). The activities which are envisaged under the MOU include sharing of latest knowhow technology. COOPERATION WITH U. CO-OPERATION WITH RUSSIA .1997 an Indo-British Coal Forum (IBCF) was established to foster greater cooperation between the two countries in coal sector. In January. France had also cooperated in the introduction of high face long wall mining technology in Kottadih Project of ECL..K.France has developed expertise in thick seam underground mining with the introduction of advance technologies like Blasting Galleries and Longwall Sub-level Caving.K. organization of meetings for exchange of information. The Forum provides a platform for mutual consultat ions and cooperation between the coal industries of both the countries under the auspices of the Govt.

COOPERATION WITH KAZAKHSTAN A proposal has been received from embassy of the Republic of Kazakhstan regarding various projects for Industrial & Innovation development of Kazakhstan. There is a project relating to extraction & realization of coal. (ii) Indian side requested Russian side to expedite response from Zarubezhugol Company in respect of Indian investment in the coal sector of the Russian economy. Russiawas requested to participate in the tendering process. CIL. CO-OPERATION WITH GERMANY . NLC and SCCL had not shown any interest in any of the proposal.(i) The Russian side is interest in participating in tendering for design and construction of the existing coal mining enterprises in India. Amarpali and Magadh OC project of CCL will be developed through outsourcing. Representative of Russian companies in India will be in touch with CIL about the tenders that are likely to be floated. Indian side intimated that CIL s policy is to procure equipment. materials and spare parts through tendering process/Global tendering.

Delays and unpredictable costs due to the actions of sub-national governments and high costs associated with inefficient customs clearance systems. technology and equipment through training. COOPERATION WITH CHINA . CO-OPERATION WITH AUSTRALIA y y Indian companies report no significant barriers or constraints to trade and investment into Australia apart from shortages of skilled labour and some minerals inputs . (iv) Exchange of expertise in coal mine safety. onerous requirements on foreign companies with existing or former joint ventures in the Indian market. y y y Australia and India agreed to support further work to develop industry collaboration on mining technology services and equipment and export opportunities under the framework of the Australia-India Resources Strategy and/or as part of a broader Asia Pacific Partnership strategy in relation to sustainable use of fossil fuels.(i) Joint Venture for mining abroad with technological cooperation from Germany. seminar. workshop etc. particularly high WTO bindings for tariffs on many products. (ii) Cooperation in capacity building specially in underground mines. (iii) High pressure water jet technology for extinguishing mine fire and excavation. Significant impediments remain for trade and investment in India.

8. Secretary (Coal) and the following bilateral issues/projects were discussed in the meeting. . Madhuban project( BCCL). 7. Deputy Administrator of State of Administration of Work Safety (SWAS) State Administration of Coal Mines Safety (SACCS). Chinese delegation was led by Mr. BCCL -Moonidih project-Seam RXVI Top. Foreclosure of Deferred Guarantee Payment issued by SBI to CMEI&E towards 3 sets of Longwall equipment of SECL. 1. The strengthening of the power support of three Longwall projects at SECL. 3. Hard Roof management techniques of Churcha west mine of SECL. Short supply of spares. 5. Zhao Tiechui. Resin capsule manufacturing.Mishra. 12.K. Performance of existing Longwall faces at SECL. 13. 11. 2. Co-manufacturing of spares in India. PR China and Indian delegation led by Dr. Short Longwall equipment for Balrampur project of SECL. Re-training and Rehabilitation of mine workers. 4. Jhanjra project of ECL. Spare parts catalogue & price list. Development of opencast mine in China with co-operation from Indian side. 6. Co-manufacturing of spare parts.9th meeting of the Indo-China Joint Working Group on Coal held during 9th 11th February 2004 in India (New Delhi). 9. 15. 10. P. 14.

Extraction of deep seated and coastal lignite deposits by hydro excavation technology.16. . The following areas were identified for co operation by the visiting South Africa delegation in August. Extraction and utilization of Lignite Bed Methane. 23. 18. of South Africa has been requested for an early convenient date and place for the meeting of the Working Group of Coal between the two countries. Latest reconditioning technique to improve the life of reconditioned belt from 50% to 80% of new one. 20. Govt. COOPERATION WITH SOUTH AFRICA A Working Group was constituted on 3rd March. 19. 2002. Joint review on status of Longwalls supplied by CME. Ministry of Coal. 17. 22. Extraction of pillars developed by Board and pillar by Longwall equipment. Govt. Response is awaited. 2003 Chaired by the Secretary. Beneficiation of Coal Technology for conversion from coal to oil. 21. Method of Fly Ash Utilization from lignite based thermal Power stations. Method of Marcasite segregation from RCM Lignite. of India with Director General (Coal & Mines) Republic of South Africa as CoChairman. Longwall mining in deep seated reserves. Mechanisation in Bord and Pillar System of Mining.

L GRAPH .C.C.Performance growth of B.

RAW COAL PRODUCTION 450 400 350 300 250 200 150 100 50 0 1974-75 1991-92 1996-97 2001-02 2006-07 2007-08 2008-09 MAN POWER ..

4.2007 700000 600000 500000 400000 300000 200000 100000 0 1.1975 1.1997 1.2009 PRODUCTIVITY .2002 1.

4.5 1 0.5 3 2. * Export profits from specified minerals and ores are eligible for .5 4 3.L 1.C.5 2 1.C.5 0 1974-75 1991-92 1996-97 2001-02 2006-07 2007-08 SWOT Analysis of B.

3. pig iron. Least importance is . Large quantity of high quality reserves 6. 2. * Minerals in their finished form exempt from excise duty. Labours easily available 4. ranks among the top producers of iron ore. Exports iron-ore to China and Japan on a large scale Weekness y Mining operations are not environment friendly. * Low customs duty on capital equipment used for minerals. tin. on nickel. bauxite. Low labour and conversion costs 5. unwrought aluminium. third largest producer of coal and lignite & barytes. * Capital goods imported for mining under EPCG scheme qualify for concessional customs duty subject to certain export obligation. manganese ore and aluminium. World's largest producer of mica.certain concessions under the Income tax Act.

000 tonnes in the U.S. and y Historically. y There exists considerable opportunities for future discoveries of sub-surface deposits with the application of modern techniques. opencast mining has been favored over underground mining. environmental pollution and reduced quality of coal as it tends to get mixed with other matter.given to environment concerns. y Current economic mining practices are generally limited to depths of 300 meters and 25 percent of the reserves of the country are . and Australia. Opportunities y Considerable potential exists for setting up manufacturing units for value added products. The output per miner per annum in India varies from 150 to 2. y High rate of illegal mining y Coal mining in India is associated with poor employee productivity. This has led to land degradation. India has still not been able to develop a comprehensive solution to deal with the fly ash generated at coal power stations through use of Indian coal.650 tonnes compared to an average of around 12.

Gujarat. Privatization of ports may bring the needed efficiencies and capacities. Prospecting licenses have . Maharashtra.In India. the logistics infrastructure such as ports and railways are overburdened and costly and act as bottlenecks in development of free market. Bihar.5 million. Threats y Foreign Investment in the Mining Sector During 1999. On the Indian rail network. Special freight corridors would raise speeds. In addition. and increase the system's reliability. Haryana and Madhya Pradesh.beyond this depth y Strengthening of logistics in coal distribution . cut costs. the Government had cleared 7 more proposals of leading international mining companies for prospecting and exploration in the mineral sector to the tune of US$ 62. freight trains get a lower priority than passenger trains.142 sqkms in the states of Rajasthan. a problem that promotes delays and inefficiency. 65 licenses have been issued till date for prospecting an area of around 90. capacity addition by the Indian Railways is necessary to increase freight capacity from the coal producing regions to demand centers in the northern and central parts of the country.

Meridien Minerals of Canada. These include BHP Minerals. etc.been granted in favour of Indian subsidiaries of well-known mining companies. Mittal Steel and Alcan have announced plans for expansion in India y y y A heavy tax burden discourages further investment. RBW Mineral Industries supported by White Tiger Resources of Australia. Politicians undervalue the industry's contributions to the economy. y Large integrated international metal manufacturers including POSCO. Metmin Finance and Holding supported by Metdist Group of Companies UK. Stricter environment rules restricting mining activities ISSUE AND CHALLENGES FACED BY ORGANISATION . Phelps Dodge of USA. CRA Exploration supported by Rio Tinto (RTZ-CRA).

Less number of rakes or wagon are used strict monitoring and strong deployment of security forces to curb the illegal activities. y Coal India will address the problem of shortage of man power particularlarly the statutory category y y Delay in supply of equipment. Poor performance by one party to whom the outsourcing contract was awarded and non-commencement of work by another party who was awarded outsourcing job for removal of OB y y Ageing of equipment deployed in mines Safety Findings of my project . Rules and regulation of the government .y y y y coal supply to power sector is to be improved further. Magazines of navratan company News paper . Public sector companies are major consumer of Bibliography y y y y y http://www. Prices are set by the ministry of coal which is not up to the mark. It has very limited area to work.y y y y y B. Recommendation y y y use new technology for mining. Increase the number of rakes and wagans. They should take more safety measures for mining. Here is the competition of coal is with international http://www.L don¶t proper distribution system of coal.

A case study on clean coal technologies .

independently or together. and Section 5 draws some lessons from that analysis. More specific to clean coal are the many efforts undertaken by industrialised countries¶ governments and industries. This is all the more true as coal is simultaneously the fossil fuel with the highest carbon content per unit of energy and the fossil fuelwith the most abundant resources in the world. Some lessons might have direct implications on coal with large implications for future global CO2 emissions. Section 2 briefly defines and reviews clean and efficient coal technologies. clean or cleaner or more efficient coal use is already the subject of numerous forms of international collaboration. An analysis of recent and on-going international collaboration with China on clean coal highlights lessons learned that are not discussed in other case studies on international technology collaboration and climate change mitigation. the current importance of coal in world emissions makes this study more than a mere example of successful or unsuccessful technology collaboration and experiences providing lessons for other areas. development banks and the GEF. the regional development banks. to transfer efficient technologies or equipment to developing countries. in particular. numerous bilateral efforts with varying degrees of success. This is why it is given an important place in this paper. Section 3 describes the broadlandscape of international collaboration on clean coal. Collaboration on Research. D&D) occurs. Professional associations also play a role in the internationalisation of clean coal concepts and technologies. various projects supported by the World Bank and regional development banks. in particular. bilateral cooperation.1 Coal and the local and global environment Coal is the least clean fossil fuel with respect to both local and global environment issues. Section 4 analyses the successes and failures of collaborative efforts with China undertaken by various industrialised countries. These efforts include. They include. through collaborative efforts such as the five technology ³implementing agreements´ under the auspices of the International Energy Agency that relate entirely or partially to coal technologies.There are many reasons for performing a case study on coal. aiming either at reducing local polluting emissions or global CO2 emissions from coal use. the World Bank and the Global Environment Facility (GEF). Policy collaboration takes place within various institutions and international bodies. Development and Demonstration (R. Second. in particular. . The Technologies and Their Potential 2. which is currently by far the largest and most active market for coal technologies. Many such efforts ± and probably the best documented ones ± are in China. and more collective efforts through regional cooperative frameworks such as the Asia Pacific Economic Cooperation (APEC). including the recent Carbon Sequestration Leadership Forum. First. and perhaps the most successful project ever undertaken and financed by the GEF ± a project on industrial boilers.

as coal¶s ratio of hydrogen atoms over carbon atoms and power generation efficiency are relatively low compared to other fossil fuels. but will not be considered in this paper. regional and global pollution problems unless cleaner and more efficient coal technologies are used. While oil accounts for 36% of total primary energy supply (TPES). Ultimately. Coal is primarily burnt for electricity generation. but its absolute consumption will continue to increase. focuses on the impact of coal combustion on air quality and greenhouse gas concentrations. Coal combustion emits particulates. at least in the next three decades. for example. both fuels are responsible for 38% each of global energy-related CO2 emissions. or as a source for liquid fuels (mostly in South Africa). . notably from mining. therefore. coal will remain the largest fossil fuel resource available. the share of coal in TPES will fall to 22% and coal will be overtaken by natural gas.Theenvironmental impacts include those of the mining industry and coal transportation ± on the landscape.based on existing energy policies in both the industrialised and developing world. Efficient coal use Efficient coal use is currently the primary means of reducing coal¶s GHG impacts as carbon dioxidecapture and storage are a long way from being commercially viable. Stronger policies favouring energy efficiency improvements and non-carbon emitting energy sources can modify the picture ± but coal will remain an important energy source in the coming decades. the net result of 38 GW of projected new integrated gasification combined cycle coal plants with carbon capture and sequestration equipment. against 23% for coal. Steam coal is also used for process and comfort heat in many industries and in the residential and commercial sectors. either directly in old steam locomotives in various developing countries. while oil and gas will become progressively depleted. It is also a source of gaseous fuels (synthetic gas). water tables and other environmental media. but GHG abatement combined with air quality issues will make clean coal technologies essential. It entails relatively higher emissions of CO2 than other fossil fuels. Another possibility is to use coalplants to increase the share of biomass in the electricity mix through co-firing of biomass and coal. including some radioactive materials. In analysing the ³Climate Stewardship Act´. According to recent IEA projections. Increased use of coal will exacerbate local. nitrogen oxides. in a much higher proportion than oil or natural gas and. by a publication from the US Department of Energy¶s Energy Information Administration (EIA 2003). causes local and regional pollution problems (contributing to acid rain and increased ground-level ozone levels). and global climate change.rivers. In the longer run. This paper. Coal is burnt in isolated stoves or industrial boilers for central heating systems. less 206 GW of retirements. CO2 capture and storage could be necessary to reduce global CO2 emissions. however. Fuel switching in favour of natural gas is occurring world-wide but will be limited by resource availability. This can be illustrated. Coal plays a small role intransport. A third dimension is the reduction of methane emissions. sulphur oxides. Mitigating climate change will not eliminate coal use in any foreseeable future. a proposal sponsored by Senators McCain and Lieberman to bring overall US emissions back to 2000 levels by 2025. mercury and other metals. Coking coal is used in the steel industry. the EIA forecasts a decline in US coal-fired generating capacity from 315 GW in 2001 to 147 GW in 2025. Coal is also responsible for methane emissions.

Current demonstration plants based on gasification have an efficiency of 42-43%. particulate control is generally the first step and often relies on electrostatic precipitators. Further deployment and development indicate that this could exceed 50% in a similar time frame for advanced forms of supercritical pulverised coal firing. re-powering enables large increases in power generation for a similar fuel demand. They include: co-firing and re-powering with biomass. Increased working temperatures will further increase the efficiency of supercritical plants. These ³clean coal´ technologies extend from coal washing to combustion to end-of-pipe techniques. but are only cost-effective in plants close to the end of their technical life. NOx andparticulates when coal is burned to generate electricity at conventional. total GHG emissions will be reduced by about 1. Almost two-thirds of the international coal-fired power plants over 20 years old have an average efficiency of 29%. New installations can differ markedly with respect to CO2 intensity.000 GW is installed worldwide. Many NOx reduction technologies are employed at . Coal washing reduces the amount of ash in raw coal to facilitate combustion and increase the energy content per tonne. or cogeneration) can increase the energy efficiency of coal plants to much higher levels ± 80% or more. The latest full-size state of the artplants in industrialised countries rely on supercritical technology with efficiency exceeding 45% with favourable cooling water conditions. one kilowatt-hour produced from coal in developing countries emits 20% more carbon dioxide than in industrialised countries. There are many options for improving plant performance and reducing emissions. At the other end of the process.4 Gt per year (global energy-related emissions are about 24 Gt). combined heat and power (CHP. Coal blending and briquetting are also efficient fuel preparation methods. as well as large CO2 emission reductions. If they are replaced after 40 years with modern plants of 45% efficiency. with the use of existing infrastructure. Where demand for heat exists. with efficiency of more than 50% being envisaged. According to an APEC (2004) study. re-powering with CHP or gasification. Current and emerging re-powering technologies can achieve much larger reductions in CO2 emissions. thus reducing costs and implementation time. while new sub-critical plants can reach an efficiency of 38-39%. Clean coal use Environmental control technologies were developed to remove or prevent the formation of SO2. Flue gas desulphurisation units can remove 90% of the SO2 or more and arewidely adopted. Coal-fired generating capacity of about 1. In many cases. it is also possible to reduce the sulphur content in coal in order to decrease the production of sulphur dioxide when burnt. As a result. Refurbishment of older thermal power stations gives up to a 12% reduction in greenhouse intensity as well as significant increases in power generation (at a significantly lower unit cost than that of a new power plant).5 percentage points. coalfired power stations. emitting almost 4 gigatonnes (Gt) of CO2 per year. re-powering with super critical boiler. Low to medium cost improvements can increase fossil-fuelled plant efficiency by 2 to 3.The average efficiency of coal-fired generation in the OECD is 36% in 2002 compared with 30% in developing countries. either for some industries or for district heating. refurbishing can often be beneficial and CO2 emissions reduced at no cost. Taking into account changes in operating costs and revenue from power generation and the annualised capital cost.

IGCC systems are among the cleanest and most efficient of the emerging clean coal technologies: sulphur. possibly with other fuels (from biomass or petroleum residues) provides heat. This relatively new technology is being used to exploit coal seams that are otherwise impossible to mine. Around 90% of the sulphur can be removed as a solid compound with the ash. The injected gases react with coal to form a combustible gas which is brought to the surface and cleaned prior to utilisation. There are a number of expressions of FBC technology. a number of proven methods exist to separate CO2 from gas mixtures. Other OECD countries may follow with their own regulations in due course. FBC reduces emissions of SO2 and NOx by the controlled combustion of crushed coal in a bed fluidized with jets of air.commercial plants: low-NOx burners. FBCs operate at a much lower temperature than conventional pulverized coal boilers. more recently. In the UCG process. While technically sound. power and synthetic fuels. IGCC systems involve gasification of coal. CO2 capture technologies are not new. usually by high temperature reaction with oxygen. Many more poly-generation plants are found in the oil industry than in the coal industry. CO2 Capture and storage Deep emission cuts may require deployment of geological carbon capture and storage technologies. could be more widely used in developing countries. none of today¶s commercial CO2 .over-fire air. cleaning the gas produced. Residual heat in the exhaust gas from the gas turbine is recovered in a heat recovery boiler as steam. selective catalytic reduction. reburn. the opposite may not be true: the removal of local pollutants has an energy cost and thus tends to slightly increase CO2 emissions. Advanced combustion technologies offer an alternative approach to these conventional emission abatement measures. and particulates are removed before the gas is burned in the gas turbine and thermal efficiencies of over 50% are likely in the future. clean and efficient technology. The FBC is particularly suited to poorer quality fuels. nitrogen compounds. water/steam and air or oxygen are injected into a coal seam. Another option is that of ³polygeneration´: gasification of coal. this relatively low-cost. Finally. gas and chemical industries. and combusting it in a gas turbine to produce electricity. gasification could also be operated in situ with underground coal gasification (UCG). concern over the emission of heavy metals into the air have become an important issue in the USA where legislation has been enforced. Also. Sulphur released from coal as SO2 is absorbed by a sorbent such as limestone. Legislative pressures in OECD countries have driven these developments and are expected to continue and push the technologies into ever greater performance. greatly reducing the amount of thermal NOx formed. While efficiency improvements and advanced combustion technologies tend to reduce all polluting emissions. which can be used to produce additional electricity in a steam turbine generator. The two main technologies are Fluidised-Bed Combustion (FBC) and Integrated Gasification Combined Cycle (IGCC). but the one gaining most market penetration is known as Circulating Fluidised Bed Combustion (CFBC). which is injected into the combustion chamber along with the coal. to meet the most demanding standards. For the past sixty years these technologies have been routinely used on a small scale by the oil. non-catalytic reduction techniques and. though complex to operate.

capture technologies were developed for large power plants and scaling them up is expensive and energy intensive. as much as possible. this scale suggests that storage capacity is unlikely to be a major constraint on CO2 removal. oil and natural gas is stored throughout the earth. which have enormous storage capacity. Sufficient proof of storage permanence is essential for any credible carbon dioxide capture and storage strategy (IEA CCC 2004). The most conventional approach is to capture the CO2 from combustion products in power plant flue gas or industrial exhaust. policy . It is important to match sources of captured CO2 and storage sites. This is known as post combustion capture. The concept of CO2 capture is linked with CO2 storage in natural geological formations that may have once held carbon (depleted oil reservoirs and deep coal seams) or in saline formations. to reduce CO2 transportation needs. In the oxygen combustion (usually called oxy-fuel combustion) approach.9 Gt CO2 in 2030. Carbon in the form of coal. There are also naturally occurring CO2 deposits that supply CO2 to the oil and chemical industries. coal is gasified or natural gas is reformed to produce synthesis gas (syngas) of carbon monoxide (CO) and H2. which is the first step towards gaining public acceptance. O2 and recycled flue gas is used to increase CO2 concentrations in flue gas prior to capture. These new policies are needed to create a level-playing field for capture and storage technologies alongside other climate change mitigation measures. provided current knowledge is improved and long-term storage guaranteed. including research. Two other approaches to capturing CO2 happen before fossil fuel combustion. Both approaches increase CO2 concentrations in the exhaust gas stream making CO2 easier to capture.500 to 14.9 Gt CO2 in 2050). The concept of injecting CO2 in plain ocean waters raises serious environmental concerns and is highly controversial. International Technology Collaboration This section describes on-going collaborative efforts on clean coal technologies. A recent modelling exercise at the IEA (2004b) suggests that at a carbon price of US$50/t CO2 ± translating into an electricity production cost increase of 1 to 2 US cents per kWh ± introduction of CO2 capture and storage amongst all other options would lead to additional emission cuts on a Gigatonne scale (4. Furthermore. a water/CO shift then takes place to produce H2 and CO2 for CO2 capture.Atmospheric CO2 concentration stabilisation will be less costly if capture and storage are included in the mitigation options ± but leakage rates or even the risk of large-scale leakage from underground reservoirs might be a critical issue.development and demonstration (R. Public awareness of CO2 capture and storage technologies. Hence. The capture step incurs most of the cost of carbon capture and storage processes. In the hydrogen/syngas approach. the main challenges associated with capturing CO2 are reducing costs and the amount of energy required for capture. is still very limited. prospective deployment of carbon dioxide capture and storage technologies requires appropriate legal and regulatory frameworks and policies. The main challenge associated with geological storage is the prevention of CO2 leakage. Besides R&D challenges. IPCC estimates for geological storage capacities range from 1. 7. measurement systems which monitor and verify carbon dioxide storage must be developed. D&D) and information exchange. There are currently three main CO2 capture approaches.000 Gt of CO2.

The European Union is providing financing for cooperation among its Member States.000 abstracts of coal literature. Sponsors include the South African Anglo Coal and Eskom.collaboration and the role ofprofessional associations. The CCC is in the process of producing the Clean Coal Compendium which will soon be available on the Centre¶s website. Operational management of the IA is assigned to an Operating Agent who is accountable to the Executive 1 There are currently 16 members. their individual units. Since then. CCC technical review and assessment reports are distributed widely to nominated parties as part of the membership subscription. emission control equipment. It is highly recognised as a source of impartial information in this area. Canada. The initial focus was on capture and storage of CO2 produced in power stations fired on both coal and natural gas. the Indian BHEL. the Coal Committee. It is the world¶s foremost provider of information on efficient coal supply and use. The Operating Agent for the IEA GHG is IEA Environment Projects Ltd. the opportunities for technology transfer worldwide. where appropriate. as well as emission standards applicable to these plants. Based in London with a staff of 23. Topics include mining. Six out of the more than forty existing implementing agreements have activities partially or wholly related to coal. governments and industry. 3. combustion. R. transport. in a balanced and objective way without political or commercial bias. These are a core product and about 15 are produced each year. Japan. IEA GHG is a cost sharing IA in which participants contribute to a common fund to finance the activities. It shows. the USA and the European Union. the Australian CoalIndustry Consortium. activities have expanded to cover a wide range of technologies aimed at reducing the emissions of greenhouse gases. Carbon dioxide capture and storage has drawn the attention of the international scientific community. There is also a Coal Abstracts database and eight databases which make up CoalPower5.. At country level there are Austria. the disposal of residues and emission control. D&D. Italy. its annual budget is ¼ 2 million1. This will be an encyclopaedia on topics related to coal use. D&D collaboration and information exchange Since its creation in 1974. Sweden. A brief analysis underlines the usefulness of international collaboration. and for dissemination of related information: the IEA ³Implementing Agreements´. CoalPower5 contains details of the world¶s coal-fired power plants.2 Greenhouse Gas R&D Programme IEA GHG was set up as an international collaborative activity in 1991.1. the International Energy Agency has provided a structure for international cooperationin energy technology R. the Beijing Research Institute of Coal Chemistry (BRICC). Market studies have remained in demand and the emphasis in recent years has focused on power generation and the environmental consequences of coal use. IEA Clean Coal Centre The IEA Clean Coal Centre (CCC) was formed in 1975 in the wake of the oil crisis. the UK. a UK registered . Coal Abstracts is a searchable database of the world¶s literature on coal containing about 200.

a network of researchers on solvent capture of CO2. Clean Coal Sciences The focus of the Implementing Agreement on Clean Coal Science is the basic science of coal combustion3. industry leaders. and one on monitoring of underground CO2 storage). R. and information dissemination. The focus on emissions is primarily concerned with toxic or noxious emissions. technology developers. The work programme is conducted using both task sharing and cost sharing. and public audiences such as environmental NGOs. In the 5th Programme. This Agreement has led to numerous commercial applications. to governmental and other policy makers. among others: ³large scale generation of electricity and/or heat with reduced CO2 emissions from coal. D & D cooperation within the EU Clean Fossil Fuels have been a subject of the 5th (1999-2002) and 6th (2003-2006) Framework Programmes supported by the Commission of the European Communities. and identify methods for the effective utilisation of combustion by-products. develop techniques that control and reduce solid. The specific objectives are to encourage. A list of actions included. confidence building by promotion of technology development and the organisation of research networks (e. and ³cost effective environmental abatement technologies for power production´ (financing received: ¼40 million). The main activities are the production of technology and market information. including combined heat and power´ (financing received: ¼160 million). key actions 5 and 6 concerned energy R&D and were respectively ³cleaner energy systems. Energy Conservation and Emission Reduction in Combustion The Implementing Agreement on Energy Conservation and Emissions Reduction in Combustion aims at accelerating the development of combustion technologies for use by industry that demonstrate reduced fuel consumption and have lower pollutant emissions. In the 6th Framework Programme. liquid and gaseous emissions associated with combustion processes. Current work includes modelling and diagnostic methods to cofiring with other fuels and biocoprocessing. The work programme is conducted through task-sharing and information exchange between participants. improve operating efficiency. The cost shared component involves a common fund which is used to support coal research studies at the International Flame Research Foundation in the Netherlands. support and promote research and development that will lead to improved understanding and characterisation of conventional combustion processes. including the development of a new generation of low-NOx burners which has already achieved sales of over $400 million in one participating country. Many of these projects concerned clean coal technologies.g. rather than greenhouse gases4. the Energy Research Area includes longer term actions aimed at . Participants also undertake collaborative work at each others¶ facilities. including renewables´ and ³economic and efficient energy for a competitive Europe´. biomass and other fuels.company2.

Scientific monitoring of the CO2 storage in oil fields at Weyburn (Canada) and in saline aquifer deep below sea floor at Sleipner (Norway) are the flagships of this international collaboration. An example is the . The purpose of the CSLF is to make these technologies broadly available internationally. and France have joined. Germany. This specifically includes projects involving the following: information exchange and networking. Several already approved projects receive funding of around ¼36 million. economic and market studies. research and development. which governs the overall framework and policies of the CSLF. DC by representatives of 13 countries and the European Commission. The activities of the CSLF are conducted by a Policy Group. South Africa. While there are several large scale international CO2 sequestration projects underway. institutional. political. public perception and outreach. this first-ever ministerial-level sequestration forum underscores the new importance given to international cooperation. The CSLF charter was signed on June 25. which reviews the progress of collaborative projects and makes recommendations to the Policy Group on any required action. planning and road-mapping. and others as authorised by the Policy Group Several multilateral environmental agreements dealing in particular with various forms of air pollutionhave also had an enormous impact on clean coal technologies. and legal constraints and issues. A special report will be published in 2005. Since then. R&D on the permanence of CO2 storage. 2003 in Washington. and regulatory environments for the development of such technology. and to identify and address wider issues relating to carbon capture and storage. is an area of special interest for international collaboration. This could include promoting the appropriate technical. facilitation of collaboration. bringing the total number of members to 17. regulatory. Collaborative projects may be undertaken by the CSLF as authorised by the Policy Group at the recommendation of the Technical Group. Policy collaboration The Carbon Sequestration Leadership Forum (CSLF) is an international climate change initiative of theUS Government focusing on development of improved cost-effective technologies for the separation and capture of carbon dioxide. Third call in the 6th FP included funds of around ¼30 Million available for CO2 capture and storage projects including clean hydrogen production from fossil fuels. Another form of international scientific collaboration is the on-going assessment of carbon dioxide capture and storage technologies undertaken under the auspices of the Intergovernmental Panel on Climate Change (IPCC). necessary to gain confidence and public acceptance of this option. D&D projects The relatively new area of carbon capture and storage has international R&D projects on clean coal. The charter will stay in effect for 10 years. International R. demonstrations."Capture and Sequestration of CO2 associated with cleaner fossil fuel plants" and is the only fossil fuelrelated research priority in this Programme. support to policy formulation. for a global value above $100 million (IEA 2004b). and a Technical Group.

and public opinion generally . transport and power generation. non-governmental association of coal enterprises. Professional associations The World Coal Institute. Ensure that decision makers . efficient fuel.are fully informed of advances in modern Clean Coal Technologies that steadily improve the efficient use of coal and greatly reduce the impact of coal on the environment. essential to worldwide generation of electricity and steel manufacture.1979 Geneva Convention on Long-range Transboundary Air Pollution and its seven protocols currently in force. Membership is open to coal enterprises worldwide. with member companies represented at Chief Executive level. The WCI has numerous publications. . Improve public awareness of the merits and importance of coal as the single largest source of fuelfor electricity generation. Present membership is drawn from six continents.wci-coal. safe and economical energy resource Promote the merits of coal and upgrade the image of coal as a clean. Broaden understanding of the vital role that metallurgical coal fulfils in the worldwide production of the steel on which all industry depends. In recent years. Support other sectors of the worldwide coal industry in emphasising the importance of coal and its qualities as a plentiful. The current work programme continues with work on near-zero emission technologies for coal-fired power generation and on sustainable development and coal. working worldwide on behalf of coal producers and coal consumers. Current members are from 17 countries accounting for about 75% of world coal production. and had tremendous implications for clean coal technologies. The World Coal Institute (WCI) is a global non-profit. clean. thereby acknowledging that coal security is as important as the effects on the environment. The objectives of the World Coal Institute are to: Provide a voice for coal in international policy debates on energy and the environment. the CIAB has focused attention on clean-coal technologies for power The Coal Industry Advisory Board The Coal Industry Advisory Board (CIAB) is a group of high level executives from coalrelated industrial enterprises advising the IEA on measures to encourage investment in coal production. The UN Framework Convention on Climate Change and its Kyoto Protocol as well as other possible future approaches for international co-operation on mitigating climate change ± some of which directly target clean coal technology dissemination ± may also have important implications. conferences and workshops and a website: www. which initially focused on mitigating acid rains in Europe.

the Czech Republic and Hungary. are being created for the proven but not yet competitive technologies and for demonstration purposes. EURACOAL provides a meeting platform for its members and represents their interests in Europe by dealing with European institutions and political organizations and distributes coal information The role of technology collaboration Wide technology deployment usually needs to be preceded by major R&D efforts. and the relevant organisations of the New Member States: Poland. Direct treatment of coal and flue gases encompasses well established. proven. The clean coal case suggests that the form of international collaboration depends heavily on the degree of maturity of a particular technology: open international collaboration is possible only for the very new and risky technologies. demonstration phase and market introduction. Belgium. The role it plays with clean coal technologies is of a different nature. this role can be played by multinational industries and consulting companies. Its task is to promote coal's contribution to security of energy supply within the enlarged EU and to price stability. economic. Arguably. Cost-shared RD&D programmes naturally save money.The EURACOAL The European Association for Coal and Lignite (EURACOAL) integrates associations and companies representing the coal industries of Austria. Slovenia and Serbia. processing and synthesising abundant information may play an even more important role by accelerating diffusion of knowledge and understanding on technologies and their environmental. and commercialized technologies ± but carbon dioxide capture and storage is in its infancy for large scale applications. the situation varies.g. Exchanging. and provides more opportunities for cleaner technology diffusion and transfer (Philibert 2004a). concentrating power solar technologies. Great Britain. The more political aspects may be better dealt with under the various forms of international technology collaboration considered here. while Pressurised FBD and IGCC are subsidised demonstration projects. Germany. although joint collaborative projects face major constraints resulting from property rights and confidentiality agreements. with respect to engineering. Bulgaria. EURACOAL is the voice of the coal industry in Brussels. accelerate learning-by-doing processes and economies of scale that reduce the costs of new technologies. Clean and efficient coal technologies show various levels of maturity in this respect. It is important that governments develop both domestic and international environmental policies so that these conflicting trends result in an overall improvement in the environment. . more competitive framework is created. for the mature technologies. In this latter case international information exchange is still possible. Philibert 2004b). In accelerating economic growth. France. current globalisation simultaneously increases the pressures on the environment. International collaboration may have played an important role in keeping some renewable energy technologies alive during times of weak or inexistent policy support in most countries (e. also at international level. Supercritical steam and CFBC plants are commercial. Greece and Spain. as well as Romania. such as carbon dioxide capture and storage. Public-private partnership arrangements. Regarding efficient power generation technologies. social and policy implications.

represent only half of Chinese coal consumption ± a much lower share than the world average of about 69%.Coal use in China China expects its power generation to at least triple in the next twenty years. With respect to energy-related CO2 emissions. Industrial boilers in China have small unit sizes by international standards. particularly in northern Chinese cities. is estimated to cause 110. largely due to high rates of coal use. The two most important sources of demand for industrial boilers are light industry and the textile industry. Every 100 g/m3 increase in total suspended particulate concentrations also led to a 6. Typical efficiency levels for Chinese boilers are in the range of 60-65%. raise sulphur dioxide emissions from power plants from 8. which require process heat and power. 2000). The latter.75 per cent increase in the incidence of chronic broncho-pneumonia in coal-burning areas (WHO. respectively. Environmental consequences of coal use Major cities in China are some of the most polluted cities in the world.An investigation based on data for 50 million people in 26 cities showed that the average PM10 pollution in urban districts and in control districts were 460 g/m3 and 220 g/m3. Chinese industrial boiler designs and production methods were based on pre-1950 design principles. .5 million tonnes in 1995 to 21 million tonnes in 2015. however. however. The expected increase in coal use would. compared to at least 80% in developed countries. respectively. The IEA (2004a) projects a total capacity of 1187 GW in 2030 against 360 GW (in 2002). and coal. the US. More than 500 Chinese cities are said to have air quality standards below the World Health Organisation¶s (WHO) criteria. districtresidential areas and commercial buildings. Particulate and sulphur levels exceed WHO and Chinese standards by a factor of two to five.3% in Europe. About 40% of Chinese coal is burnt in half million ³industrial boilers´ in industry and in district heating systems. Over half of them in the mid1990s produced only 1 to 4 tonnes of steam per hour. More than three quarters of electricity generated in China is from coal combustion. while end-use consumption in the residential and commercial sectors account for the remainder.000 premature deaths each year. over 95 % of industrial boilers in China burn coal. Conversely. coal is responsible for 80% of China¶s emissions against 26. and the corresponding average mortality from lung cancer was 14 per cent and 7 per cent. Increased coal consumption in China has also important price consequences for other consumers. China is comparable with the European Union at about 15% of world emissions ± behind the largest emitter. is expected to show the biggest increase. mostly from burning coal or biomass for cooking and heating. Various direct and indirect usages in industry and energy sectors account for another 42%. which currentlyprovides three quarters of power generation. Power plants. partly because of ambient outdoor and indoor pollution levels. Coal-fired plants would total 776 GW ± a decrease due to rapid growth of gas-fired generation and renewables. Chronic obstructive pulmonary disease is the leading cause of death in China. and space heating for individual apartment buildings. However.

considerable knowledge of coal gasification with many examples in the chemical industry for production of fertiliser chemicals. where the average cost of power generation from an IGCC plant would be 32% higher than power from a PC plant. A recommendation of the China Council for International Cooperation on Environment and Developed made in 2003 to the Chinese Government essentially equates coal modernisation with polygeneration through gasification. IEA experts indicate that supercritical plants totalling more than 60 GW of capacity were recently ordered. the overall risk factor would be 23% greater. Gasification enables conversion of coal ± including high-sulphur coal resources . and shortfalls in plant availability and performance. TFEST 2003). even in developed countries. high-value-added fuels for vehicles. The main risk factors include capital cost over-run. However. The average cost of power generation from clean coal technologies is declining and might make them eventually competitive with conventional pulverized coal (PC) steam plants. for a demonstration plant at Yantai. and other instruments such as effluent charges. As in other countries. There will likely be a surge towards 1000 MW power plants with ultrasupercritical steam conditions (Minchener 2004). IGCC is not yet a fully mature technology. there is only 1 IGCC prospect currently in China. Since the 1960s. they might have little . The National Development and Reform Commission (NRDC) has recommended advanced supercritical plants for large scale power generation and most recent orders have been for supercritical units. There are still a large number of these subcritical units under construction. Consequently. Units range widely in sizes from less than 25 to 660 MW. are beyond the scope of this paper. This explains why polygeneration has been suggested as a more realistic alternative for China (Zheng et alii 2003. Ten supercritical units were in operation in 2003 and twenty more units were approved for construction. Chinese engineers have developed their own designs of small fluidised bed combustion equipment independently of early efforts in other countries (Watson & Oldham 1999). Theyare usually less stringent than equivalent norms and standards in OECD countries. notably in the coldest parts of China. An extensive review of the norms and standards for existing and new plants of different types in various parts of China.with very low levels of air pollution compared to most existing coal combustion technologies in China. construction delay. and other possible energy products. polygeneration systems can produce a variety of energy products: clean synthesis gas and electricity. Based on coal gasification (³syngas´). There is however. advanced clean coal technologies have substantial potential to improve the efficiency of coal-based power generation and to reduce the harmful impacts of power generation. but are frequently revised and tightened. Over 1000 commercial circulating fluidised bed (CFB) boilers have been put into operation since 1989 and fifteen 300 MWe CFB boilers are in the planning or construction stage (Minchener 2004). The dominant installed technology is pulverised coal combustion with a subcritical steam cycle. high-value-added chemicals. The cost and the risk disadvantages are substantially higher in China.Clean coal Primarily for domestic environmental motives. according to the Nautilus Institute (1999). the interest of the Chinese government in clean coal technologies is beyond any doubt. where it delivers electricity at a higher cost of about 20%. residential and industrial uses. More than 30 GW of cogeneration plants are currently in operation.

the Netherlands. and the government¶s approval procedure and policies for technology transfer. the lack of necessary information and technology transfer experience. Most bilateral programmes aimed also to generate economic gains for Western companies through trade or technology transfer ± traditionally in such programmes. All the programmes considered aimed at assisting China in improving the environment. Technology transfer through patent acquisitions Jin & Liu (1999) listed patent acquisitions of various clean coal technologies by Chinese enterprises: for coal extraction & preparation equipment. The UK focused on the technologies that China might need and appreciate. that the pace of patent acquisition has slowed after 1992 while the number of direct imports grew. most of medium or small enterprises are the major producers of thermal-energy equipment with high energy consumption and high GHG emission. The US made great efforts on IGCC and advanced combustion technologies. Japan worked on almost all possible technologies and made a great number of demonstration projects. The German programme was different in that economic gain was less an objective than poverty alleviation in China. There are three reasons for this: their limited capital and weak technology strength. All were fully mature technologies in developed economies. governments tend to promote their own industries. Japan. They note. There is only one project for desulphurisation. for power equipment design and manufacture technology. But few of them have taken part in the transfer process of industry boilers. Australia. before the GEF project on industrial boilers took place Bilateral collaboration In 2001. however. The acquired technology mainly includes dust-removal devices. Industrialised countries adopted different approaches in this cooperation: Australia focused on the coal trade position and blended coal combustion. for industry boiler design and manufacture technology and for desulphurization and dust-removal technology for coal-boilers. Analysing these patent acquisitions.impact given the widespread absence of monitoring equipment. the Asian Development Bank and the United Nations Development Programme. By contrast. towards easy adoption in China. however. This was. Germany. Germany focused on mature technologies. . which they attribute to the economy reforms and the breaking off of the mechanisms for technology transfer previously dominated by the government. China emphasised its desire to explore measures to accelerate the deployment of clean coal technologies and requested the IEA to look into this and help develop recommendations on how to accelerate the clean coal technology deployment in China. the United Kingdom and the United States. as well as with the EU. A study (Novem 2003) was made considering collaboration with the World Bank. Jin & Liu note that the acquiring entities of technologies are mainly large or super-large enterprises. which leads to poor enforcement (Watson & Oldham 1999). The Netherlands focused on their own technologies.

as fully acknowledged on the British side. After the study mentioned earlier (Novem 2003) another collaborative efforts with China was undertaken under the auspices of IEA. ³Best Practices in Chinese Power Plants´. Amongst other collaborative efforts from the UK. but the report gives very little detail. Bank analytical and advisory activities (AAA) contributed significantly to sector policy reform and institutional development. A team of experts from IEA member countries undertook a detailed audit of two typical Chinese power plants and formulated recommendations of cost-effective efficiency and environmental improvements. the World Bank. the World Bank helped build 20 percent of the transmission lines and 20 GW of generating capacity. coal briquetting plants. It has. and 900megawatt generating plants in China. The results of these efforts are somewhat mixed. First. One project deals with performance optimisation with fifteen measuring vehicles financed with a ¼10M loan from Germany¶s development bank KfW. up to 2000. shifted. the Bank leveraged its influence in two ways. simplified flue gas desulphurisation. one project aims at developing clean underground coal gasification (UCG) in China. including the first 300-megawatt. since then. are said to have contributed to significant emission reductions (Novem 2003). which travel to power plants across China. training and knowledge transfer. A number of German efforts. while the UNDP has focused on other energy sources and the EU has focused on management.´Meanwhile. The US Congress did not approve this additional allocation of financial resources to the Program. One possible exception is that of coal washing. they have reservations regarding the high technology guided drilling. several large new plants were built in China by Western companies. The Australian collaboration on two 125 MW existing units at the Banshan Power plant showed that increasing efficiency from 35% to 40% was possible and affordable using blended coals (Boyd 2004). However. Over the course of the decade. including the first supercritical pressure steam plants in Shanghai (1200 MW) build by a consortium led by Alstom and Sargent&Lundy. Development banks In the power sector. 2003). 600-megawatt. focused on low-costinitiatives in the areas of information dissemination and training. and the Asian Development Bank have participated in the financing of various large coal-fired plants and related projects (see below). This refusal. Apart from its direct contribution to supply expansion. China introduced . ³Whilst Chinese experts recognise the potential benefits of deep UCG technology. the cost of oxygen generation and the fact that deep UCG is unproven in large scale and sustained operation. requesting a $75 million budget necessary to support a small number of operations in China and Eastern Europe.Meanwhile.) but most have not led to dissemination of these technologies beyond the demonstration projects (Oshita & Ortolano 2002. Their report was presented to a wide audience from the Chinese power sector. and especially in the past five years. which appears widespread in China and may be due to early collaboration with Japan. such as those of Japan (circulating fluidised bed boilers. thereafter. Most demonstration projects have worked. etc. especially in the power sector. coal preparation technologies. according to the Nautilus Institute (1999) ³emphasised the need for coordination of existing channels rather than adding a new mechanism for the financial support of CCTs in developing countries´. The US DOE¶s effort. especially power plant performance optimisation. In 1995 the US DOE proposed an initiative for US government support for the promotion of CCTs in developing countries.

Retrofitting existing boilers had been deemed insufficient for sustaining efficiency improvements in the sector. As noted by the designers of the original GEF project: ³if the thermal efficiency of the current stock of industrial boilers in China could be raised to those of similar sizes in the developed countries. However. Emission reductions from this project have been estimated over the total lifetime of the investments to 637 Mt representing a third of the total 1. especially the application of simple automatic controls. GEF grant funds were used to acquire advanced production equipment from abroad to upgrade their production lines to allow mass production of the successful models.extensive policy and institutional changes that were first outlined in a 1994 Bank report on power sector reform and further developed in other AAA and through pilot projects. Under Phase 2. the benefits can be much lower. A more ambitious project was envisioned by GEF: ³Upgrading existing Chinese boiler models through the introduction from abroad of advanced combustion systems and auxiliary equipment. of 10% increases of thermal efficiencies with existing industrial boilers. as the demand for new boiler technology in China grew. for a total cost of $100M with GEF contributing a third of this amount. that efficient industrial boilers had been imported into China in previous years. There are good examples. however. and technical assistance and training for boiler producers and consumers´. . however. This resulted in a cost per avoided tonne of CO2 of about 3 US cents. The GEF China has been the host of the largest-ever GEF project. the lifespan of a typical boiler in China was only about 15 years.7 Gt for all 104 active climate-related GEF projects (GEF 2004).mainly from Germany. Under normal conditions of operation. launched in 1996 to introduce efficient industrial boilers in the country. Investment funding was provided to nine Chinese boiler manufacturing enterprises in two phases. These changes include price reform. Minchener (2004) note that the new boilers have achieved efficiency levels in the range 80-85% ³under the artificial conditions of a verification test´. Under Phase 1. One must note. adoption of new high efficiency boiler models through the introduction of modem manufacturing techniques and boiler designs suitable for burning Chinese coals. Minchener (2004) concludes that coal quality remains a critical issue. and improved boiler production techniques was considered crucial for raising thermal efficiency by minimizing exit gas temperature and excess air in the boiler. The energy sector is perhaps the most successful example of the Bank¶s dual track approach to lending and policy reform. making existing boilers an ever-smaller percentage of the total market. corporatisation of government energy production units. with typical boilerhouse operating staff and typical supplies of raw coal. the US and Japan (Jin & Liu 1999). introduction of competitive power markets. separation of management and regulation. in particular as a result of an earlier UKChina technical assistance project (Minchener 2004). GEF funds were used to acquire advanced international technologies for new and existing Chinese industrial boilers models and produce the model industrial boiler units Phase 2. coal consumption by small boilers could be reduced by 60 million tons per year-a saving of about 17 percent´ (GEF 1996). and improvements in the policy framework for private participation in infrastructure.

Findings and Conclusion of the case study y y y Strong demand growth may slow supply-side progress Technology transfer is more than equipment transfer IPR protection matters for transferees as well SYNOPSIS Pricing and distribution of coal .

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