INTRODUCTION TO STUDY

This project report is a part of our M.B.A. Curriculum, which requires working
in a company and making a project report about the study of the structure of
the organization allowing putting theory into practice. This helps to gain
practical knowledge of the various functions and functional parts of a business
firm.

 OBJECTIVE OF THE STUDY

 To Study the organizational structure.
 To analyze the benefits of starting the industry.
 To study the production and finishing process of the Industry.
 To understand the decision-making process.
 To understand and evaluate the large-scale industries.
 To study various tasks being performed by departments.

 SCOPE OF THE STUDY

The study has been conducted to become familiar and to study various
aspects of large-scale industry.

Hence this study would be very much helpful for any new entrepreneur as
well as the student of the concerned subject. As a part of my studies in
MBA, this organizational study has given me a chance to enrich my
knowledge and talent. It has given me an opportunity for a practical
exposure of how a business works.

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 LIMITATIONS OF THE STUDY: -
 The study of Large-Scale Industries in a short period will not provide
us the complete data required. Hence a conclusion about the status,
structure and work becomes little difficult to study.
 It becomes difficult to know each and every detail about the
departments, if we get an opportunity to discuss with the people of all
departments and units it would help us to get more valid information
 If data collected from different units is not accurate and true then our
study becomes impracticable.
 For various reasons it is difficult to get financial information of the firm.
 Being in the industry and working under heavy machineries, sound
pollution makes it difficult to have observations for a long time.

 METHODOLOGY
The source of data required to carry out this report are classified as:
 Primary Sources
 Secondary Sources

1. Primary Sources
The primary source of data has been drafted by interviewing the
company mentor for gathering information pertaining to work
study, during the period of my study.

2. Secondary Sources
Secondary sources of information were derived from various
sources like
 Websites
 Company records
 Company statements

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 INTRODUCTION TO INDUSTRY

*Industry- Metals and Mining

The metals and mining sector are the industry dedicated to the location and
extraction of metal and mineral reserves around the world. Mining of stones
and metal has been a human activity since pre-historic times. Global reserves
of metals and minerals are mined for profit and then used in jewelry-making,
industrial applications, and investments. The sector has a significant number of
companies located around the world and operates with large revenues.
Mineral mining is the extraction of minerals such as coal and precious
gemstones. Coal is a significant mining product produced in substantial
amounts all over the world. This mineral provides around 30% of global energy
and is heavily relied upon for electricity production. Environmental concerns
have led some countries to decrease coal production, yet many developing
nations rely heavily on increasing coal production to sustain continued
economic growth.
The global mining and metals industry are focused on future growth through
expanded production, without losing sight of operational efficiency and cost
optimization. The sector is also faced with the increased challenges of changing
expectations in the maintenance of its social license to operate, skills shortages,
effectively executing capital projects and meeting government revenue
expectations.
Mining techniques can be divided into two common excavation types: surface
mining and sub-surface (underground) mining

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  Present Status

India is the 3rd largest producer of coal. Coal production stood at 676.51 million
tons in FY18. India has the 5th largest estimated coal reserves in the world, standing
at 319.02 billion tons in FY18.
India ranks 4th in terms of iron ore production globally. In FY18, production of iron
ore stood at 210 million tons. India has around 8 per cent of world’s deposits of
iron ore.
India stood as the third largest crude steel producer with output of 101.4 million
tons in 2017. Crude steel production in the country rose to 102.34 million tons in
FY18.
According to Ministry of Mines, India has the 7th largest bauxite reserves- around
2,908.85 million tons in FY17. Aluminum production stood at 1.60 million metric
tons during Apr-Sept 2017 and is forecasted to grow to 3.33 million tons in FY20.

 *GLOBAL SCENARIO
The global mining metals market has been segmented into four key regions:
Europe, Asia Pacific, North America, and Rest of the World. Asia Pacific has been
the major region in the market due to the growing demand from emerging
economies such as China, Indonesia, Australia, and India. In the last couple of years,
the region has witnessed increased investments in the mining sector with market
players expanding their production capacities and exploring new mining sites. The
rapid growth of economy in China and India has created favorable opportunities
for the growth of the market. In fact, China is now playing a major role in the growth
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of the market. It is the largest importer of copper and imports around 45% of the
total copper mined across the globe.

India holds a fair advantage in cost of production and conversion costs in steel and
alumina. Its strategic location enables convenient exports to develop as well as the
fast-developing Asian markets.

India produces 95 minerals– 4 fuel-related minerals, 10 metallic minerals, 23 non-

metallic minerals, 3 atomic minerals and 55 minor minerals (including building and
other minerals).
Rise in infrastructure development and automotive production are driving growth
in the sector. Power and cement industries are also aiding growth in the metals and
mining sector. Demand for iron and steel is set to continue, given the strong growth
expectations for the residential and commercial building industry.

India holds a fair advantage in cost of production and conversion costs in steel and
alumina. The country is the 3rd largest steel producer with production of 101.4
million tons of crude steel in 2017. Crude Steel and Finished Steel production during
2017-18 was 102.34 million tons and 104.98 million tons respectively. Iron ore
production in the country increased from 129.32 million tons in FY15 to 200.96
million tons in FY18. It is forecasted to grow at the rate of 5 per cent in FY19. The
Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in
the mining sector and exploration of metal and non-metal ores under the
automatic route, which will propel growth in the sector. Power and cement
industries also aiding growth in the metals and mining sector.

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 Key players in the market

1. BHARAT ALUMINIUM COMPANY

Bharat Aluminium Company, a subsidiary of Vedanta Resources, Bharat has the

distinction (one of many) of being the first to have Captive Power Plant. BALCO
has two Bauxite mines in Chhattisgarh state – one at Mainpat with a capacity of
7, 50,000 TPA and the other at Bodai Daldali (Kawardha) with a capacity of
12,50,000 TPA.
BALCO is playing a crucial role in introducing Aluminium as a potential
alternative to other metals like Steel in construction, and Copper in power
transmission industry, and was the first to produce alloy rods for conductors
used across the industry.

2. HINDUSTAN COPPER

Incorporated under the administrative control of the Ministry of Mines,

Hindustan Copper Ltd is the nation’s only vertically integrated copper producing
company. Hindustan manufactures copper from the stage of mining to
beneficiation, smelting, refining and casting of refined copper metal it
downstream.

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The bulk of the operations are spread across India, Khetri Copper Complex (KCC)
at Khetrinagar, Rajasthan, with the Indian Copper Complex (ICC) at Ghatsila,
Jharkhand, Malanjkhand Copper, Project (MCP) at Malanjkhand, Madhya
Pradesh, Taloja Copper Project (TCP) at Taloja, Maharashtra.

3. NATIONAL ALUMINIUM COMPANY LTD

Established in 1981, NALCO is a Navratna CPSE under the Ministry of Mines,
Govt of India. The company has a 68.25 lakh TPA Bauxite Mine & 22.75 lakh
TPA Alumina Refinery located at Damanjodi in Koraput dist. of Odisha, and
4.60 lakh TPA Aluminium Smelter & 1200 MW Captive Power Plant located
at Angul, Odisha.

But it’s not only metals, NALCO also has two wind power plants - A 50.4 MW
wind power plant at Gandikota, Andhra Pradesh and another of 47.6 MW wind
power plant at Jaisalmer, Rajasthan. Nalco has a fully mechanized opencast
bauxite mine in Damanjodi. The present capacity of mines at Damanjodi, is
68.25 lakh TPA, which works out around 6825,000 tons per annum.

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4. HINDALCO

Hindalco Industries Limited is the metals flagship company of the Aditya Birla
Group and just so happens to be an industry leader in aluminium and copper.
A turnover of a small sum of US$17 billion makes Hindalco the world’s largest
aluminium rolling company and one of the primary producers of Aluminium in
Asia.

Hindalco has operations in aluminium, and copper, with a world class copper
smelter that stands as one of the world’s largest custom smelters at a single
location.

Looking at the company’s aluminium smelting operations, and there are many
(Uttar Pradesh, Odisha, Madhya Pradesh) produce a combined 1.3 million tons
of primary aluminium per year.

5. VEDANTA
Vedanta is one of the world’s largest natural resources company with
interests in Zinc, Lead, Silver, Copper, Iron Ore, Aluminium, Power and Oil &
Gas, with a significant foothold across India.

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 The company has a number of major operations across, deep breath, Copper
(Vedanta Ltd. Copper Division – Sterlite Copper), Zinc (Hindustan Zinc Ltd),
Aluminium (Bharat Aluminium Company Ltd, Vedanta Ltd – Aluminium Division),
Iron Ore (Vedanta Ltd – Sesa Iron Ore), Oil & Gas (Cairn India Ltd), Power (Vedanta
Ltd – Power Division, MALCO Energy Ltd, Hindustan Zinc Ltd).

PEST ANALYSIS

PEST Analysis is the tool which is used to know the factors which affects the
production process and helps to develop strategies related to the market at
present scenario.

It brings all the points from the main factors which helps to analyze the plan for
the upcoming future contingencies and to plan for the development for the
production plans.

 POLITICAL FACTORS: -

Difficulty in obtaining clearances and leases from the state governments.

There are various clearances which need to be obtained from different
ministries stated below which is a cumbersome and time-consuming process:

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 Department of Mines
 Indian Bureau of Mines
 Goa State Pollution Control Board
 Geological Survey of India
 Ministry of environmental and forests
 Central Board of Excise and Customs
 Department of Heavy Industry
 Ministry of labor

Government’s approach of giving priority to the domestic players

To curb the increasing pressure on the domestic steel industries due to
increasing global prices after recession, the Government used duties and
royalty as tools to keep the supplies in the domestic market.

 ECONOMIC FACTORS: -

The fluctuations in the exchange rates impact the performance of the mining
Industry. Indian iron ore industry thrives on exports. Goa exports 96% of its
iron ore production and 84% of revenues is accounted for exports to China.

 As per mining legislation of India there is no restriction on foreign equity

holdings in mining sector companies registered in India.
 China being the highest buyer of iron ore, it is the key driver of the global
iron ore industry. Its economic scenario impacts the entire industry.
 Change in the scale of steel production

The prices of coking coal have varied greatly in between 2016- 2017 and the rise
in prices has at the same time not been linear. In fact, China had the price per
ton as 75 USD in February 2016, which rose to 300 USD in April and finally went
down to 200 USD in December 2017. The face is while the prices did stabilize
based on market forces, it was accompanied by a number of natural disasters

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which led to supply chain deficiencies further leading to price rise. Another
important raw material, iron ore also had its price fluctuate from 2016- 2017.
These fluctuations have placed a heavy burden with increased difficulty in
making sales and production forecast which on the whole poses a huge
challenge for the Metal and mining industry.

 SOCIAL FACTORS: -
As metal and mining industry are a part of the society, it is very important
for the industry to look after the people living in the society. This sector of
industry has a demerit of polluting the environment, so the industry is
responsible for controlling the environment pollution.
With the emergence of such industry sector people are getting more job
opportunities and various facilities which are a huge benefit for the people
living the society.
The industry is responsible to maintain a good relation with other
competitors in order to understand their strategies and make plans which
will benefit the industry.
More programs and campaigns should be conducted by the industries for the
awareness of environment safety as well as employee’s safety.

 The problem of mining-induced displacement and resettlement (MIDR)

poses major risks to societal sustainability.
 The closure and suspension of work in more than 50 iron ore mines in Orissa
over the past few months has hit supplies for export.
 The unrest among local residents due to landlessness, joblessness,
homelessness and changes in population dynamics.

 TECHNOLOGICAL FACTORS: -
Many technological improvements have helped the mining industry in cost
controls, emission controls, and mineral conservation and in bringing down
the alumina content of the ore. With the advancement of technology, it is
becoming easier for the people to have access to everything. As metal and

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mining industry are a huge part of the society, they have to take the help of
technology in managing everything, i.e. machineries, environmental
pollution control, conservation of energy, supplying energy etc. for all this
purpose technology plays a vital role.
But with the advancement of new technologies it has various demerits for
the employees as there is a risk of further job opportunities. In mines manual
work will be preferred less and more machineries will be used for production
process because manual work is time and energy consuming. So, it will be
difficult for the people to get job in this sector with the emerging
technologies.
Wearable technology, in particular, has made the mine a safer workplace.
Perhaps its most useful application is geo-fencing, which sends mobile alerts
to workers every time they get too close to unsafe areas like blast zones and
hazardous gas burst zones. RFID-enabled wearables also have the ability to
store crucial information about miners’ pre-existing medical conditions and
emergency contacts, should the need arise. In high-risk areas, jobs like
inspection, and stock and safety monitoring have been outsourced to
drones, in order to keep humans out of harm’s way.
Vedanta Resources are investing in software and Internet of Things (IoT)
technologies to monitor the health and efficiency of their machinery. These
innovations can also alert the team if any parts of the equipment are likely
to fail within the next few months, allowing them to be replaced before
operations are hampered.

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 PORTER’S 5 FORCES ANALYSIS

Porter's Five Forces is a model that identifies and analyzes five competitive forces
that shape every industry, and helps determine an industry's weaknesses and
strengths. Frequently used to identify an industry's structure to determine
corporate strategy, Porter's model can be applied to any segment of the economy
to search for profitability and attractiveness.

The model is named after Michael E. Porter. This includes: -

1. BARGAINING POWER OF SUPPLIERS

 When critical production inputs are similar, it is easier to mix and match
inputs, which reduces supplier bargaining power. Coal Industry produces,
extracts and distributes coal and supplies energy throughout the nation. So,
the inputs used for production are similar in nature which reduces the
bargaining power of suppliers. Other competitors also use the same inputs
so this reduces the bargaining power

2. BARGAINING POWER OF BUYERS

 When customers have limited choices, they end up paying more for the
choices that are available. As MCL produces coal and being one of the
subsidiaries of Coal India ltd. customers have limited choice available. So,

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 with the available supply of coal, bargaining power of buyers is less so they
pay more or have to pay the amount fixed by the coal ministry, which is a
positive sign for MCL.

3. THREAT OF SUBSTITUES

 There is no substitute to MCL as it has a monopoly market. Limited number

of substitutes means that customers cannot easily switch to other products
or services of similar price and still receive the same benefits.

4. THREAT OF NEW ENTRANTS

 Private companies are a threat to MCL. Though they are negligible and MCL
stand a lot ahead of them and they always analyze the market and come up
with new technologies. Advanced technologies make it difficult for new
competitors to enter the market because they have to develop those
technologies before effectively competing. The requirement for advanced
technologies positively affects MCL. And High capital requirements mean a
company must spend a lot of money in order to compete in the market.
This is a threat for new entrants. At the same time the economies of scale
help producers to lower their cost by producing the next unit of output at
lower costs. When new competitors enter the market, they will have a
higher cost of production, because they have smaller economies of scale.
With this we can say that MCL has very negligible private competitors in the
market.

5. INDUSTRY RIVALRY

Government policies and regulations can dictate the level of competition

within the industry. When they limit competition, this is a positive sign for MCL.
Few competitors mean fewer firms are competing for the same customers and
resources, which is a benefit for MCL. Being a large-scale industry, when they
are growing revenue quickly, they are less likely to compete, because the total
industry size is also growing. The only way to grow in slow growth industries is
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to steal market-share from competitors. This is a positive and great benefit to
MCL as it has huge market share.

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 CHAPTER- 2
COMPANY PROFILE

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  COMPANY PROFILE

ABOUT COMPANY
Mahanadi Coalfields Limited (MCL) is one of the major coals producing
company of India. It is one of the eight subsidiaries of Coal India Limited.
Mahanadi Coalfields Limited was carved out of South Eastern Coalfields
Limited in 1992 with its headquarters at Sambalpur. It has its coal mines spread
across Odisha. It has total seven open cast mines and three underground mines
under its fold.

They are having two different types of mines

 Open cast
 Under ground

Open cast mining is also known as Open-pit mining or open-cut mining

is a surface mining technique of extracting rock or minerals from the earth
by their removal from an open pit.
Underground mining refers to underground mining techniques used to
excavate hard minerals.

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 Operations: -

MCL extract coal via opencast mining and underground mining. Currently they
have 51 sanctioned mining projects (including 2 exhausted projects) with a
sanctioned capacity of 224.41 MT and a capital outlay of Rs. 11,832.52 Crore.
Of these, 35 projects (including 2 exhausted projects) have been completed
with a capacity of 102.58 MT and a capital outlay of Rs. 3,000.017 Crore.
Currently, there are 16 ongoing projects with a capacity of 121.83 MT and a
capital outlay of Rs.8,832.50 Crore.

 Mission and Vision Statements of the Company

Vision statement-
“To be one of the leading energy suppliers in the world through best
practices from mine to market”.
Mission statement-
“To produce and market the planned quantity of coal products efficiently
and economically in an eco-friendly manner with due regard to safety,
conservation and quality”.

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 Objectives of the company-
 Ensuring achievement of Annual Action Plan targets for coal production
and off-take, OBR removal, lignite production and lignite-based power
generation.
 Infrastructure development to augment coal and washed coal
production.
 Leveraging technology to minimize environmental externalities.
 Cutting edge research and development initiatives.
 Enhancing exploration to augment resource base.
 Quality and reliability in customer services.
 Expeditious and joint solutions to inter-ministerial issues.
 To acquire and take over any of the business activities carried on by the
Coal India ltd.
 To mine, quarry and manufacture coke and other by products of coal,
purchase or otherwise acquire all minerals and other materials of every
kind needed for resulting from the mining, manufacturing, production,
processing of coal, to install, operate and manage all necessary plants,
mines, establishments, works.
 To supply energy throughout the nation.
 To optimize generation of internal resources by improving productivity,
preventing wastage and to mobilize adequate external resources for
meeting investment needs.
 To maintain high standards of safety for accident free coal mining
through safe mining practices and continuous safety audit and risk
assessment.
 To conserve environment through of Committed Plan for reclamation
and plantation.
 To maintain the quality of ambient air and water within the prescribed
norms.
 To introduce mass production technology viz. continuous miners etc. for
enhancing underground production of quality coal.

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  To operate mega opencast projects using high capacity equipment with
higher availability and utilization secured through long term
Maintenance and Repair Contract (MARC).
 To beneficiate coal on a substantially larger scale by adding new
capacities and supplying quality coal as per customer's choice.
 To create an enabling environment for full realization of employee’s
potential through mindset change, customized HRD programs and
synergic teams.
 To create an enabling environment for full realization of employee’s
potential through mindset change, customized HRD programs and
synergic teams.
 To provide adequate number of skilled manpower to run the operations
and impart technical and managerial training for upgradation of skill.
 To improve work life balance by better health care, quality life in
townships and excellent educational facilities.

PRODUCT PROFILE

 Products of the Company

Mahanadi Coalfields Limited only deals with mining and distributing coals
throughout the country.

Coal extraction from mines

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  MANUFACTURING PROCESS: -

Fig: Mining Methods

 The five steps of the coal production process include:

1. Exploration & Development

2. Mining
3. Processing
4. Loading & Transportation
5. Rehabilitation

 Step 1: Exploration and development

The first stage to any coal production operation is exploration and

development. This takes place to locate and determine the most appropriate
methodology to extract the minerals. Exploration and development involve the
combined efforts of geologists, geotechnical engineers, mining engineers, coal
technologists and surveyors. The geologist is responsible for defining the
shape, size and quality of the coal reserves and for producing a computer
model. This model is used by the mining engineers to plan and manage the
mining process taking into consideration:

 Mine wall stability.

 Scheduling of coal production at a consistent rate and quality.

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 Controlling groundwater seepage and rainwater runoff.
 Mining block and backfill designs for minimal possible overburden removal
distance.
 Optimizing equipment deployment and productivity.
 Minimizing operational interruptions.
 Optimizing drill and blast practices.
Surveyors support both the geologists and mining engineers by ensuring that
the data required for deposit modelling is correctly gathered in the first
instance. Surveyors also confirm that the engineers' mine plans are accurately
reflected in the mine development.

 Step 2: Mining

Mining can take place through open cut or underground mining methods. The
mining process involves the removal of overburden and extraction of coal but
can be considered as four distinct operations:

a) Topsoil
b) Laterite
c) Overburden
d) Coal

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 Step 3: Processing

Processing involves crushing, screening and beneficiation.

 Crushing: Mined coal can include lumps up to a meter in size, so

crushing to a manageable size is required. Coal crushing can include a
two-stage process dependent on deposit size.

 Screening: Screening is used to separate different sizes of crushed coal.

In this process coarse and fine coal is separated so to accommodate for
specific markets and industrial usage.

 Beneficiation/Washing: During beneficiation, coal is processed to

remove impurities reducing ash and Sulphur thereby improving the
market value of the coal. Beneficiation can improve the quality of
contaminated coal that would otherwise be wasted.

Most cleaning processes involve washing the coal in order to separate coal
particles from stone particles as coal is considerably lighter.

 Charring: Coal can be charred, a process wherein hydrogen and oxygen are
removed from the coal to make it purer form of carbon. Once processed
according to specifications, coal is loaded and transported accordingly.

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 Step 4: Loading and Transportation

 Distribution policy

Distribution of coal is done with the help of:

 By Road: The validity period to complete lifting of coal by road shall be 45

days from the date of issue of Sale/Delivery Order. No extension of validity
will be allowed in any case.
 Railways: With the emerging technologies the govt has offered the facility
of transferring the coal through railway mode. So that bulk amount of coal
can be transferred and time can be saved.

 Step 5: Rehabilitation

Mine site rehabilitation is important to environmental sustainability.

Rehabilitation involves returning the land to its natural state post mining
through strict, well researched strategies of revegetation and the regeneration
of natural ecosystems.

Rehabilitation involves a comprehensive process of classifying overburden

material, land recontouring, seeding and regeneration.

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1. Overburden Material Classification

Overburden material is classified according to its potential to cause

geochemical impacts (acid rock drainage) on the environment. Dumping of
waste material is undertaken so the best materials end up near the surface of
waste landforms and the other material is encapsulated in the middle.

2. Land Recontouring

When the landforms are no longer needed for mining or dumping purposes the
slopes are recontoured to around 10 degrees to control surface runoff and to
ensure stable slope. Topsoil is then spread to a depth of 150 millimeters before
the area is contour ripped, fertilized and seeded with local natives.

3. Seeding

Rehabilitation areas are seeded at the break of the winter rainy season, and
initially are susceptible to erosion damage until germination and root
development has occurred. Historically dumps were rehabilitated to pasture
species. This approach was chosen to stabilize the dump out-slope quickly to
prevent erosion. More recently efforts have been directed to the re-
establishment of native flora.

4. Regeneration

Native species do not germinate and develop until the following spring,
therefore the potential for massive erosion is present during the winter. A
strategy has been developed whereby native bush species comprising grasses,
groundcovers, shrubs and trees, are sown together with a "nurse" crop of
cereal rye.

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 MARKET SHARE: -

 According to 2016-17, MCL has posted the highest net profit among all the
subsidiaries. MCL’s profit after tax grew 7% from 4207.75cr to 4491.09cr.
 MCL has contributed 48% to CIL’s net profit of 14000cr for FY17.
 MCL’s contribution to the Odisha exchequer spiked by 23.81% from
2550.50cr to 3157.92cr. This included 586.46 as sales tax/vat and 72.11cr as
entry tax or other levies.
To meet the burgeoning coal demand of the country, Mahanadi Coalfield
Limited (MCL), comprising of coalfields of Orissa, has been given a target to
produce 112 million tons of coal in the current fiscal as against 103.12
MT output achieved last year.
On percentage terms, MCL’s target is 8 percent higher than the previous year’s
achievement while same for SECL( South Eastern Coalfield Limited) works out to
two percent. The CIL record shows that last year, out of the 4.5 MT higher
output achieved by CIL, three million tons was contributed by MCL. If this
growth rate is maintained, MCL will be the number one coal company under CIL
umbrella within two years’ time.

 MCL’S OTHER BUSINESS:

With coal reserves for few more decades, they build other business towards
thermal power generation, power transmission, green energy and most

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 recently, the coal logistics for enhancing the availability of coal to the consumer
industries.

a) POWER GENERATION

Coal power generation has fueled the growth tactics and sustainability ideals here
at MCL. They have progressed towards establishing a coal-based thermal power
plant of 1,600 (2X800) MW using super-critical technology, at Basundhara area,
Sundargarh. This project is slated to take off through the subsidiary Mahanadi Basin
Power Limited (MBPL).
The project is progressing quite steadily by commencing various statutory
activities. We have made progress in seeking Firms for Coal Allocation; water
Allocation; and Ash Utilization for environmental clearance. we are also in the
progress of seeking a NOC from Civil Aviation and Defense.

b) POWER TRANSMISSION

In the FY 2012-13 MCL ventured into the business of power transmission through
installation of a 220KV power transmission line. We envisaged this as a business
diversification option that would also allow us to illuminate the remote areas of
Odisha. Our joint venture company Neelanchal Power Transmission Company
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Private Limited (NPTCPL) has partnered with Orissa Power Transmission Company
Limited, for similar interventions.

c) COAL LOGISTICS

Railways for coal transportation Heavy trucks for coal transportation

Conveyor belts for transporting coals

MCL has dedicated itself to expand its business to Coal Logistics for evacuation of
Coal. Mahanadi Coal Railway Limited, established on 31st August, 2015, is a
company based on an equity participation between MCL, IRCON and IDCO in the
ratio of 64:26:10. The joint venture company will implement rail corridor projects
on a build, construct, operate and maintain model. Specific project activities would
include doubling, third line and traffic facility projects thus enhancing coal
connectivity.

 Strategies set for better environment: -

MCL has set various strategies for maintaining the environment and protecting it
from pollution through the following steps: -

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  Clean production strategies:
MCL has adopted several initiatives for clean strategies to abate their impact on
global climate change, which will improve the sustainable performance of MCL in
the long run. The vital aspects of initiatives are- the optimization of energy usage,
afforestation and water governance.

 Optimization of energy usage:

Fuel (HSD) and electricity being their primary energy sources, they intend to
maximize utilization of them by adopting low carbon technologies like surface
miner and also implementing alterative renewable energy resources.

 Afforestation:

It is always remembered that one tree means one life and it is to be saved for our
own safety. Land clearing activities in coal mining, ultimately results in the loss of
forests and its benefits. Sound development of Environment becomes an important
requirement for MCL, which steer them to increase green cover to reduce the dust
emissions produced and also the elevated temperatures of areas in the premise of
their mining locations.

 Water governance:
Every stage of coal’s lifecycle—from mining to processing relies on water. The
water they use is either extracted from surface water sources or the water from
their mine sumps. MCL is focused on more target base approach to maximize their
storage capacities than withdrawing the water from surface resources. They are
further fulfilling their domestic purposes in Basundhara colony by treating the

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abandoned Mine sump water. They also divert surplus water for recharging the
aquifers.

 Drinking water supply

The water they supply for drinking and domestic use, is withdrawn from surface
water sources or from mine water sumps is adequately treated in their Water
Treatment Plants (WTPs) operational in Talcher, Ib valley, Belpahar and Basundhara
under the Integrated Water Supply Scheme (IWSS). Treated underground mine
water is also supplied as water for drinking, domestic and agricultural uses to the
surrounding villages in their mining areas.

 Air quality management:

Emission of dust and other particulate matter is a consequence of the nature of

their operations like cutting and loading operations of coal, loading and unloading
operations of OB and coal, coal transportation on haul roads, dozing operations at
OB dumping yards, and heavy vehicles plying on haul roads. Besides, the intensity
of mining activities, the type of vehicles and equipment used, and the geological
and geomorphologic setting add to the magnitude of emissions. The environmental
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factors such as temperature, rainfall and humidity may also interfere the intensity
of dust emissions and depositions. Mines are not static, and have continuously
changing footprints with respect to haul road location and
distance, the size of waste rock and tailings sites, and have varying production and
mine development rates.

 Dust Management:

Water sprinklers to control Mobile sprinkler

air pollution

Apart from the eco-friendly technological changes that they have implemented,
they also put in significant effort to suppress the air borne dust. During FY 2016-
17, MCL deployed 80 mobile water tankers (capacity 28 KL) to control the dust
emission in their mining areas. To settle the dust generated during
transportation, outside MCL areas, they sprinkle water through mobile water
tankers of 12KL capacity on a contractual basis. they have also installed fixed
sprinklers in all their railway sidings for the same purpose. they have deployed
three heavy duty truck mounted, vacuum-operated mechanical road sweepers
to sweep and collect any coal spillage and dust over pucca coal transportation
roads at Talcher Coalfield. Now they are working towards procurement of mist
blower cum road fogger on hiring basis, for all the areas.

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 d) Overburden (OB) Management:

Overburden includes the soil and rock that is removed to gain access to the coal
deposits. It is usually piled on the surface at mine sites where it will not impede
further expansion of the mining operation moving large volumes of material is
expensive. As the overburden generally, has a low potential for environmental
contamination, so MCL fill it back in to the excavated mine voids which serves the
purpose of landscape contouring and revegetation during mine closure. The
quantity of coal they evacuate at MCL, is much more than the OB material
generated.

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 SWOT ANALYSIS

SWOT analysis is a basic, analytical framework that assesses what an entity usually
a business, though it can be a place, industry or product can and cannot do, for
factors both internal and external. Using environmental data to evaluate the
position of a company, a SWOT analysis determines what assists the firm in
accomplishing its objectives, and what obstacles it must overcome or minimize to
achieve desired results: where the organization is today, and where it may go.

 SWOT ANALYSIS OF MCL:

 STRENGTH: -
o The government is the strength of MCL. As it offers wide range of
concessions to investors in India, engaged in mining activity.
o Government provides facilities to the company in improving the
technology.
o Environment protection equipment, pollution control equipment,
energy saving equipment the concessions are provided by the
government.

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 WEAKNESS: -
o There is limited access to capital, and mines are increasingly costlier to
find, acquire, develop and produce.
o The company lacks manpower management. Due to outdated,
unattractive approach to mining education it leads to insufficient and
inappropriate human resources.

 OPPORTUNITIES: -
o Considerable opportunities exist for future discoveries of sub-surface
deposits with the application of modern techniques.
o New technology for mining is an opportunity more technology in
machineries are used for extracting coals.
o As there are very few competitors, it is easy for the company to survive
more and earn more profile because of the monopoly competition.

 THREATS: -
o Limited resources like capital, manpower, money. Heavy tax burden
discourages further investments. Private coalfields are a threat though
they are very few but they are considered as competitors.
o With the new environment policies, it becomes difficult for the company
to survive.
o Heavy machineries for extracting coals from the mines. Manual work is
reduced with the introduction of new techniques in mining.

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 CHAPTER-3
ORGANIZATIONAL DESIGN

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DESIGN OF THE ORGANISATION
Design of organization is the hierarchy of organizations work; it gives
detailed description about the working process and the responsible
personality of the organization. Organizational design is must for the
functioning for every firm as it defines the procedure of working and
responsibilities. Organization is structured in different levels
depending over its objectives. It determines the modes in which they
operate and performs. MCL also has departments which performs
their functions in order to smooth functioning of their company.
 DESIGNATIONS:
1. Chairman-cum-managing director: A. K. Jha
2. FUNCTIONAL DIRECTORS: -
 J. P. Singh Director (Tech/OP)
 K. K. Parida Director (Finance)
 L. N. Mishra Director (Personnel)

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 ORGANIZATION CHART

*The organization structure of MCL is vertical structure. Structure of the

organization is as follows: -

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 CHAPTER- 4
BUSINESS LEVEL FUNCTIONS/ PROCESSES

Page | 38
DEPARTMENTAL FUNCTIONS OF MCL:

 5 MAJOR DEPARTMENTS OF MCL:

 Human Resource Department
 Production and Sales department
 Finance Department
 Quality check department
 Marketing Department

 Human Resource Department:

Area personnel manager:
 JOB PURPOSE:
Area personnel manager position is responsible for identifying the needs of
human resources requirement, the process of hiring and development of
employees in the prescribed area of organization.

 JOB DUTIES (OR) RESPONSIBILITIES:

o He/ She has to act as a connecting bridge between the companies and
employees.
o He/ She helps to resolve the work-related problems.
o He/ She should be able to identify vacancies in advances and work
towards the filling up of the vacant positions.
o The incumbent has to analyze training programs like language training,
health and safety training etc.
o The incumbent has to conduct exit interviews to come to know about the
reason regarding why an employee leaving the organization.

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 JOB SKILLS:
o The incumbent should be proactive and good listener.
o He/ She should be motivator with leadership qualities.
o He/ She should possess effective writing skills and negotiation skills.

 Production and Sales department:

Material manager:

 JOB PURPOSE:
Area Material manager is responsible to manage all aspect of material flow
and to maintain control and accuracy over all goods inventories, including all
transactions, procurement, planning, scheduling, cost, warehouse, receiving
and shipping to ensure that customer order is fulfilled on time. The position
is also responsible to develop and manage all supplier relationship.

 JOB DUTIES (OR) RESPONSIBILITIES:

Develop, implement and manage cross functional, fully integrated planning
process that
o Incorporated makes verses buy, capacity planning, scheduling, inventory,
material and association cost element.
o Performs analysis of customer’s demand rates, forecasts and historical
material usage to develop and execute, build to order and build to
forecast plans.
o Establish and implement methods and best practices related to the
system and process that support inventory forecasting, purchasing and
material control.

 JOB SKILLS:
Material manager should have knowledge and skills on:
o Transportation, Distribution, Logistics.
o Ware housing.
o Inventory Management.
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 o Production planning.
o Queuing and simulation.
o Planning process.
o Risk management.
o Enterprise resources planning and manufacturing resources planning.
o Sales and operations planning.
o Demand management and forecasting.
o Master planning.
o Security and hazardous materials regulations.
o Supply chain synchronization.
o Vendor managed inventory.

 Finance Department:
Area finance manager:
 JOB DESCRIPTION:
Area finance managers responsibility for the financial activities happening
in the Coal mines of an area.

 JOB DUTIES (OR) RESPONSIBILITIES:

o The incumbent has to analyze to financial budgeting.
o Manage the preparation of the company’s budget.
o Report to management on various from the established budget and the
reasons for these variances.
o Assist management in the formulation of its overall strategic director
o Financial Analysis: Engage in ongoing cost reduction analysis in all areas
of the company.
o Review the performance of competitors and report on key issues to
management.
o Create additional analyses and reports as request by management.
o Interpret the company’s financial results to management and
recommend improvement of company.

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 o Compile key business metrics and report on them to management.

 JOB SKILLS:
o The finance manager candidate should have a Master's Degree in Finance
and Accounting or relevant experience in the finance area.
o More than 10 years of experience in a large-scale company

 PERFORMANCE APPRAISAL METHODS

 Area personnel manager

Team work
4
Stress handling Communicatio
3
Skills n Skills
2 Self
1
Decision Staff
Strategic Focus 0
Making Skills Sr.Manager
Subordinates
Problem
Technical skills
Solving Skills
Leadership
Skills

Graph-1.1

 TRAINING AND DEVELOPMENT:

o Judgment and decision making
o Team Management
o Managing Cash Flow
o Capital Budgeting Analysis
o Evaluating Financial Performance

 TRAINING METHOD

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 o On job training

 TRAINING DELIVERY METHODS

o Practical application
o Demonstrating

 AREA MATERIAL MANAGER

Technical Skills
4 Problem
Communicatio
3 Solving Skills
n Skills
2 and Decision…
Self
1
Supply Chain Staff
0 Team work
Management Sr.Manager
Subordinate
Strategic Accountability
Sourcing and and
Purchasing Responsibility
Risk
Management

Graph-1.2

 TRAINING AND DEVELOPMENT

o Technical Skill
o Communication skill
o Supply chain Management
o Inventory Management

 TRAINING METHOD
o On Job Training

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  TRAINING DELIVERY METHODS
o Demonstration by experts
o Work Based Assignments
o Coaching (Mainly on inventory managing)
o Practical application
o Supervised Projects

 AREA FINANCE MANAGER:

CRITICAL
THINKING
4 JUDGEMENT
LEADERSHIP 3 & DECISION
2 MAKING
SR. MANAGER
1 MANAGEING
SRESS SUBORDINATES
0 FINANCE
HANDELING STAFF
RESOURCES
SELF
SYSTEM
TEAM WORK
EVALUTION

TECHNICAL
SKILLS

Graph-1.3

 TRAINING AND DEVELOPMENT

o Judgment and decision making
o Team Management
o Managing Cash Flow
o Capital Budgeting Analysis
o Evaluating Financial Performance

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  TRAINING METHOD
o On job training
 TRAINING DELIVERY METHODS
o Practical application
o Demonstrating

 The department does the following work:

1. Recording and monitoring all the transactions.
2. Submit reports like Profit & Loss A/C, Balance sheet, etc.
3. Calculating production cost.
4. Cost report with variance analysis.
5. Bank dealing
6. Dealing with sales tax and Income tax authorities.
7. Established activities.
8. Maintaining all accounts.

 MARKETING DEPARTMENT: -

 Mahanadi Coalfields Ltd. sells coal by road, rail and rail cum sea (ex-Paradip)
to linked consumers. With the introduction of e-auction from April 2005,
where consumer/ non-consumer/ trader etc. can participate and bid for coal
for their requirement and from his desired sources.

E-Auction: Coal distribution through e-Auction has been introduced with a

view to provide access to coal for such buyers who are not able to source
coal through the available institutional mechanism. In the long run it is
expected that e-Auction may help in creating spot as well as future market
of coal in the country. The purpose of e-Auction is to provide equal
opportunity.

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 CHAPTER-5
FINDINGS/ CONCLUSIONS/ RECOMMENDATIONS

Page | 46
 FINDINGS
 After the study I found that MCL is one of the leading coalmines company
among the 8 subsidiaries of Coal India ltd.
 MCL has various departments to operate its functions. The structure of the
company is vertical structure. All the departments work together in decision
making process.
 MCL has departments like Production department, sales department, finance
department, marketing department. All these departments perform a crucial
role in the functioning of the organization.
 MCL has no freedom to set the prices as it is a subsidiary company. The
market price of coal is set by the ministry of coal.
 The association wants Coal India to offer more coal so that tariffs are not
increased.
 As MCL has a monopoly market it has very few private competitors, though
MCL is a huge government company it can not ignore the private competitors
and their strategies.
 MCL has always tried to earn profits every year and has always been in first
position to supply coal to different companies. It has also received many
awards like Mini Ratna award and also contributed a lot towards CSR
activities.
 Prices which are set by the ministry of coal which is not up to the mark. There
is no freedom of setting of prices by MCL as it is one of the subsidies of Coal
India ltd.

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 RECOMMENDATIONS

 The technology used should always be up to date so as to gain an

upper hand against competitors.
 They should look at diversification in the long run.
 They should take more safety measures for mining, as MCL has
underground mining they give proper training to the employees
regarding safety measures.
 They should utilize the resources in a proper way so that there
would be less wastage of resources.
 The company should look into safeguarding of environment. As it
has open cast mines, it is very important to control environment
pollution.
 Clearing out land for mining purpose also leads to deforestation.
So, they need to plant trees to maintain the ecological balance.
 They should implement strict monitoring and strong deployment
of security forces to curb the illegal activities

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 CONCLUSION

India is currently among the top three fastest growing economies of

the world. Coal is the critical input for major infrastructure industries
like Power, Steel &Cement. Coal India is a holding company with
seven wholly owned coal producing subsidiary companies. One of
them is Mahanadi Coalfields Limited (MCL) which is one of the major
coals producing companies of India. It is one of the eight subsidiaries
of Coal India Limited. They are having two different types of mines
Open cast mines and Underground mines. According to 2016-17, MCL
has posted the highest net profit among all the subsidiaries. With coal
reserves for few more decades, they build other business towards
thermal power generation, power transmission, green energy and
most recently, the coal logistics for enhancing the availability of coal
to the consumer industries. The main objective of the company is to
Ensure achievement of Annual Action Plan targets for coal
production, to supply energy throughout the nation, to optimize
generation of internal resources by improving productivity,
preventing wastage and to mobilize adequate external resources for
meeting investment needs.

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 REFERENCE

http://www.mahanadicoal.in/Welcome.php

http://www.mahanadicoal.in/Financial/MCL_AR%2016-17.pdf

https://coal.nic.in/sites/upload_files/coal/files/coalupload/echap
1_1617.pdf

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