BUSINESS MODEL OF COAL INDIA LTD

INTRODUCTION

Coal India Limited (CIL) is an Indian government corporation for coal mining and refining. It is owned by the
Ministry of Coal, the Government of India operating in Kolkata, West Bengal, India. It is the largest coal-
producing company in the world and a public service in Maharatna. It is also the fifth largest employer in India
with approximately 272,000 employees.

The company contributes about 82% of the total coal production in India. It produced 554.14 million tons of raw
coal in 2016-17, which is an increase from its previous production of 494.24 million tons of coal during FY
2014-15 and earned a profit of R95,435 crore (US $ 13 billion) per sale coal for the same financial year. In April
2011, the CIL was granted the Maharatna position by the Government of India, making it one of only seven with
the status quo. As of October 14, 2015, the CIL is a PSU owned by the Central Government of India which
regulates its operations through the Coal Department. As of October 14, 2015, CIL's market capitalization stood
at 11 2.11 lakh crore (US $ 28 billion) making it the 8th most important company in India.

HISTORY

Coal mining in India was primarily a private business. This changed in September 1956 when the Government of
India established its National Coal Development Corporation (NCDC). Railways-owned Collieries form the core
of the NCDC. This was to meet the country's rapidly growing energy needs to support the rapid industrial
development through five-year government programs. In the same year, the Singareni Colliery Company, which
operated in Andhra Pradesh since 1920, was also placed under state control when the Central Government and
the Andhra Pradesh Regional Government acquired 45% and 55% shares respectively.

In 1971, the Government of India made all 214 coal mines and 12 coke ovens operating in the private sector,
with the exception of those owned by TISCO and IISCO for use in captivity. On January 1, 1972, a new state-
owned company, Bharat Coking Coal Limited (BCCL) was established to control the state-owned mines and
coke-ovens. On January 30, 1973, all 711 of the country's remaining coal mines in the private sector were also
privatized. 184 of these mines were handed over to the BCCL, while the remaining 527 were transferred to the
newly opened coal mines department. 4 months later, on June 14, 1973, the department was transformed into a
separate State-owned company, CMAL. NCDC, established in 1957, merged with CMAL, and 45% of Central
Government shares in Singareni Collieries Company Ltd were also awarded to CMAL. CMAL has started
operating in its 4 divisions, namely Eastern Coalfields, Central Coalfields, Western Coalfields, and the Central
Mine Planning and Design Institute.

In 1973, all coal mines were owned by the BCCL, which operated as part of the Steel Authority of India (SAIL)
under the Department of Steel and Mining; and all raw coal mines were owned by CMAL, which was under the
Ministry of Mines and Minerals Department. For better control, both the BCCL and CMAL were introduced on
11 October 1974 under the newly formed Coalition (now Independent Minister) Department of Energy.

On November 1, 1975, a new public sector company, Coal India Limited (CIL) was established to provide
planning and efficiency in the coal sector. All 4 Categories of CMAL were given corporate status, and were
submitted under CIL and BCCL. 45% of CMAL shares in Singapore Collieries Company were also transferred
to CIL, and CMAL closed.

Thus, CIL came into operation in 1975 with less than 5 companies under it. These were Bharat Coking Coal
Limited (BCCL), Eastern Coalfields Limited (ECL), Central Coalfields Limited (CCL), Western Coalfields
Limited (WCL), and Central Mine Planning & Design Institute Limited (CMPDIL). In time, 3 other companies
were formed under the CIL by recording specific CCL and WCL sites. These were Northern Coalfields Limited
(NCL), South-Eastern Coalfields Limited (SECL), and Mahanadi Coalfields Limited (MCL).

In accordance with the 1974 Fuel Policy, the CIL re-established India's first Indian Low-Temperature Factory in
Dankuni in the late 1970s. It was renamed the Dankuni Coal Complex, and is one of the world's most active
coal-fired power plants. The Dankuni Coal Complex suffered heavy losses as a result of the Greater Calcutta Gas
Supply Company (formerly known as Oriental Gas Co.) offering unpaid amounts and repairing them separately.
Coal India plans to break into Coal-to-Methanol technology in the existing industry.

The Indian government holds 100% of the CIL equity from 1975 to 2010.

GREEN INITIATIVES

CIL planted 1.57 million saplings during 2014–15. In its Annual Report for 2014–15, it informed that it has planted
around 82 million trees over an area of around 33700 Ha.