Mr.N-Kumar - India Energy Forum

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4th COAL SUMMIT 2012
Strategy for Bridging the Gap
to meet the future need of
Coal Industry in India
20th Nov, 2012
N Kumar
Director (Tech)
Coal India Limited
INDIAN COAL RESOURCES (Bt) - As on 01.04.2012
Type -wise
Proved
Indicated
Inferred
Total
%
Coking
17.93
13.65
2.11
33.69
11.48
Non-Coking
99.62
128.42
30.28
258.32
88.00
Tertiary
0.59
0.10
0.80
1.49
0.52
Total
118.14
142.17
33.18
293.50
Depth -wise
0- 300
300- 600
0 – 600
91.92
71.46
10.76
174.14
59.33
11.04
58.42
16.26
85.72
29.21
13.71
0.50
0.00
14.21
4.84
1.47
11.79
6.17
19.43
6.62
(Jharia coalfield only)
600 – 1200
Coal Resource Availability/ distribution Scenario
(As on 01.04.12)
Total Resource (Bt)
293.50
CIL Command area
66.00
Captive allocation
45.00
Power
28.00
Others
17.00
Others
12.00
Captive (Unallocated)
22.00
Unblocked
104.50
ALL INDIA DEMAND / SUPPLY SCENARIO- Past Trend
Figs in Mt
TY IX
Plan
TY X
Plan
01-02
06-07
(Act)
(Act)
354
474
2.32
6.00
Demand
Materialization
352
464
504
549
588
593
636
Through Ind. Supply
331
421
454
490
515
524
537
2.15
4.93
Demand
CAGR %
CAGR %
Through Import
XI Plan
07-08
08-09
09-10
10-11
11-12
656
650
(Act)
493
550
598
6.52
4.98
21
43
50
59
73
69
99
Coking
11
18
22
21
25
20
30
Non-coking
10
25
28
38
48
49
69
ALL INDIA DEMAND / SUPPLY SCENARIO – Future Projection
Figs in Mt
TY XI Plan
11-12
Demand
650
CAGR %
Through Ind Supply
CAGR %
XII Plan
12-13 BE
16-17 Proj
21-22 Proj
773 *
980.50
1373
6.52
536
8.57
6.97
BE/AP 12-13
BAU
OPT
BAU
OPT
580
715 #
795 #
950
1100
4.98
Gap
XIII Plan
5.89
192.54
Coking
30.00
Non-coking
162.54
265.50
8.16
185
5.85
423
6.71
273
* Assessed by Planning Commission
# Considering CIL’s supply of 556.4 Mt & 615 Mt as mentioned in Working Group Report XII
Plan in ‘BAU’ & OPT Scenarios respectively
Year-wise/Sector-wise Coal Consumption/Demand-Mt
Sector
TY X
Plan
06-07
XI Plan
07-08
08-09
09-10
XII Plan
10-11
11-12
(Actual)
12-13
16-17
TGT/AP
12-13
PROJ
Steel
35.17
39.00
37.66
41.14
36.81
42.08
52.30
67.20
Power
(U)
307.92
332.40
362.08
378.30
390.09
399.09
512.00
682.08
CAGR %
4.32
5.32
11.31
Others
120.78
132.89
149.28
167.77
166.10
194.45
208.54
231.22
Total
463.87
504.29
549.02
587.81
593.00
635.62
772.84
980.50
CAGR %
5.70
6.50
9.06
Source-wise Production (Mt)
– Past Trend & Programme for 12-13 & XII Plan (Mt)
TY of VIII
Plan
(96-97
TY of IX
Plan
(01-02)
Production
CIL
CAGR %
TY of X
Plan
(06-07)
TY XI Plan
(11-12)
Actual
250.62
4.19
279.65
2.22
XII Plan
(12-13)
XII Plan
(16-17)
(BAU)
TGT
360.91
5.23
435.84
3.84
464.10
( 6.48)*
XII Plan
(16-17)
(OPT)
PROJ
556.40
5.00
615.00 #
7.13
Non-CIL
38.70
48.14
69.92
103.95
110.30
158.60
180.00
All India
289.32
327.79
430.83
539.79
574.40
715.00
795.00
CAGR %
4.44
2.53
5.62
4.61
(6.42)*
5.78
8.05
* Growth% over previous year
# The production in Optimistic Scenario is available only if the requisite clearances are processed in fasttracked route and delivered within the specified time schedule. The issues affecting land acquisition, R & R,
law & order and evacuation infrastructure in particular will also have to be addressed in a time bound manner
7
COAL PRODUCTION PROGRAMME OF CIL
GROUP-WISE BREAK-UP
Group
11-12
12 - 13
13 - 14
Act
BE
Target
proposed
by Sub.
Existing +
Completed
224.44
229.31
214.56
202.35
197.26
192.42
-32.02
Ongoing
Projects
212.40
232.89
259.15
286.49
306.86
325.78
113.38
Future
Projects
0.00
1.90
8.29
41.91
70.38
96.80
96.80
435.84
464.10
482.00
530.75
574.50
615.00
178.16
TOTAL
14 - 15
15 - 16
16 - 17
Projection
Plan
Period
Growth
 Production from the existing & completed projects shall register a decline
in production of around 32 Mt.
 The likely increase in production from the ongoing projects shall be about
113 Mt
 The future/ new projects is likely to be 97 Mt during the terminal year of the
XII Plan period.
8
ON-GOING PROJECTS
• 147 Projects & approved schemes are under execution
(Ultimate Capacity – about 437 Mty, approved Capital –
Rs30,000 Crs) projected to contribute 333 Mt in 16-17.
• Plan period growth
–
115 Mt.
• Bulk of incremental production to come from 54 projects incremental production - 190 Mt.
• Out of these 147 projects required clearances are available
in 82 projects, 34 projects are awaiting forestry clearances,
13 projects are awaiting environmental clearances & 18
projects require both the environmental & forestry
clearances. About 42 major projects are affected due to
delays in Land acquisition.
• All identified activities of these 54 projects to achieve
desired level of production are being monitored stringently
at appropriate level.
NEW / EXPANSION PROJECTS – XII Plan
• Envisaged to take up 126 new projects in XII Plan . (58
spill-over from XI Plan + 63 new)
• PR Cap – 422 mty ., Env. Cap Inv – 85,000 Crs
• 60 projects(PR cap- 214 Mty) to contribute around 93
Mt
• Projected production - 98 Mt in 16-17.
• Bulk of projected growth will come from - from
coalfields of N.Karanpura, Ib, Talcher & Mand-Raigarh.
Based on LOA’s granted by SLC(LT) & other commitments, the future
coal balance for CIL is to a large extent (-) ve
Figs in Mt
Projected Production
Total Commitment based on LoAs
Coal Balance
Ratio of Coal Deficit to Proj Prod
1000
911
12-13
464
911
-447
96
913
13-14
488
913
-425
87
917
16-17
615
926
-311
51
926
615
575
531
488
15-16
575
922
-347
60
922
800
600 464
14-15
531
917
-387
73
400
200
96
87
73
60
51
0
-200
12-13
13-14
-400
-600
-447
-425
14-15
-387
15-16
-347
16-17
-311
Projected Production
Total Commitment based on LoAs
Coal Balance
Ratio of Coal Deficit to Proj Prod
The envisaged
production of CIL is
less than the
commitments already
made
The peak deficit of
(447 Mt) 96 % is in
FY 2013
This necessitates to
augment the
domestic coal
production. Increase
in domestic
production is very
much uncertain and
as such requires
enhance import
facilities
The responsibility of CIL
will be huge given the
New Coal Distribution
Policy which envisage
total demand of the
country to be met by
CIL
including
coal
imports, if required.
Challenges for Enhancing Domestic Coal Production
• Land Acquisition is the biggest bottleneck in coal mining operations
– CIL has faced prolonged delays in many of its projects leading to loss of production
– Even after acquisition, possession of land presents another problem to the company
Performance Indicator

Under the XI Plan, the envisaged land
acquisition was > 62 Thousands Ha





Against it, during XI Plan, CIL was
able to acquire only approx 25,000
Ha, i.e. ~ 40 % of the target
Under the XII Plan, envisaged land
acquisition is approx 65 Thousands
Ha
Bulk of land envisaged for acquisition
in XI plan was tenancy land
However, going ahead the proportion
of forest land will increase

Reason for Delay
It is understood that
from the
present proportion of 30 %, the
forest land will increase to 50 % in
the future years
Forest Land


Involvement of multiple state and central
government agencies in forest land acquisition
leading to inordinate procedural delay
Tenancy Land

Proper Record of Rights (RoR) not being available
with State Governments for identification of
ownership of land causes problems in ascertaining
the actual ownership of the land. This complicates
the R & R process thus delaying the land acquisition.
Performance Indicator
Reason for Delay
Delay in registration of applications for
delay in furnishing NoC from the Collector
for diversion of revenue forest land for nonforestry purpose.


Forestry
Clearance


Average time for Stage I Forestry
clearance is about 4 years
Average time for Stage II
clearance is about 3 years
Thus the total time for Forestry
Clearance is 7 years against the
normative time of 2-3 years.
There is overlapping of land records
being maintained by the Revenue Deptt &
the Forest Deptt. The reconciliation is time
taking.
•
Certificate under Forest Rights
no
specific
Act -2006 is mandatory for obtaining •As
guideline/procedure/proforma
for
forestry clearance.
obtaining Gramsabha resolution and NoC
from the District Magistrate is available,
•
Any delay in issue of NoC majority of forestry clearance cases are
held up.
under the said Act has cascading
effect on issue of forestry clearance.
•
Forests Rights
Act 2006
Proposals have to pass through various
channels of State & Central Govts.

Certificate under Forest Rights
Act
-2006
has
been
made
mandatory even for renewal cases
of Forest Clearances also.
•
Performance Indicator
Environmental
Clearance


Reason for Delay
 Considerable time is taken in obtaining
‘Consent to Establish’ and ‘Consent to
Operate’ certificates.
 Delay occurs in receipt of TOR.
 Delay in holding the public consultation
process. EIA 2006 indicates a time limit
of 45 days for completion of the “Public
For every coal project it
Consultation Process” which is not
is mandatory.
fulfilled.
It takes long time than  Environment Clearance is normally
statute
granted up-to a certain peak capacity
(projected peak production) for a
specific project. Capacity enhancement
of any project requires further
environment clearance for the enhanced
capacity from MoEF, which is also time
consuming.
Performance Indicator
Reason for Delay


In last 7 years coal stock
was increased by approx
48 Mt due to nonavailability of,


Evacuation
Infrastructure

Sufficient railway rakes
Matching feeder lines as
well as loading facilities
in IB Valley, Korba &
N.Karanpura fields
Bulk of future production
will come from 5 coal
fields of CIL and it is
imperative
that
continuous investment is
made
in
logistics
infrastructure

The progress of new railway line
projects
related
to
coal
evacuation have not achieved
the desired progress in the last
few
years
(Tori-ShivpurHazaribagh,
Angul-Kalinga,
Gopalpur-Manoharpur,
Non-availability of sufficient
number of railway rakes. This
has improved
in 2012-13
because of monitoring at the
level of Chairman, Railway
Board.

CCL , MCL & BCCL are
particularly
facing
the
problems in dispatch of coal
and increasing coal inventory
levels
INITIATIVES FROM CIL TO MEET GROWING DEMAND
~ CIL, has formulated Vision 2020 document in view of the increasing requirements on
the organization.
CIL Vision 2020
~ Six Strategic Themes has been identified, namely, Scalability of Production, Operational
Excellence, Employer of Choice, Sustainability, Customer Orientation and Diversification.
~ Multiple initiatives have been discussed under each strategic theme to bring about the
transformational change in the organization.
CIL is taking initiatives to enhance annual drilling capacity to 0.70 mn meters by
FY2013 from 0.498 mn meters achieved in FY2012
Exploration
Activities
The company has intends to achieve conversion of inferred and indicated to proved
reserves 3 times the historical performance.
CIL is also undertaking systematic exploration to arrive at reliable estimate of coal
reserves and application of information technology to create geo database.
Identification
of Projects
58 coal projects of XI Plan spilled over to XII Plan and about 68 new projects
tentatively identified for XII Plan period.
Initiatives continued…
Implementation
of Master Plans
 CIL is actively working various control measures currently available for
controlling underground mine fire (in Jharia and Raniganj) delineated in
Master Plans. Implementation of Master Plan towards fire control, surface
stabilization, rehabilitation with an estimated capital out lay to the tune of
Rs.7112.11 crores, in turn CIL may able to recover locked coal to the tune of
1453 Mt to the possible extent.
 At the time of Nationalisation, no of fires were 70. Affected surface area was
17.32 Km². After taking proper mitigation measures, the affected area reduced
to 8.90 Km²
Coal
Beneficiation
 As on date, CIL is operating 17 washeries with cumulative throughput capacity of
39.04 Mty.
 CIL is going to set up another 20 integrated coal washaries with total capacity
of 111.10 Mty to supply washed metallurgical as well as thermal coal to
consumers.
 This will not only save transportation cost of high amount of ash contained in
Indian coal but also able to supply coal with much higher calorific value vis-a-vis
higher fixed carbon contained in steel and power sectors.
 CIL has turned its focus back on UG Mining for sustainable development.
Underground
Mining
 It has identified a number of UG Greenfield properties.
 Envisaged to enhance production of about 55 Mt in 16-17 from existing level of
40 Mt.
Initiatives continued…
 MoC has decided to tentatively assign 119 coal blocks
to CIL and requested for submitting a detailed time frame
in which these blocks would be brought into production.
Engagement of Mine
Development &
Operators (MDO)
 CIL has seriously thought of starting mining in the above
blocks on priority basis by engaging Mine Development &
Operators (MDOs).
 Subsidiaries of CIL have proposed 27 Mines/Blocks of
total capacity of about 136.50 Mt for operation under
MDO/PPP concept.
 Out of 27 Mines/Blocks, 12 are underground having
about 14.5 Mt capacity and 15 are opencast having
capacity of about 122 Mt.
Use of Higher Size
of Equipment
 Higher size of Heavy Equipment Mining Machinery being
commissioned in OC mines.
 Surface Miners in OC mines & Continuous Miner in UG
mines are being commissioned wherever feasible to avoid
drilling and blasting.
Foreign Acquisitions - Strategy Framework
BUSINESS MODEL:
•
•
Equity Model
–
Stake with off take contract in brown field assets
–
100% or majority stake in green field assets
Off-take Model :
–
Long term contract essentially with coal miners
–
Short term contract
TARGET PRODUCTS & DESTINATIONS:
• Mozambique
– Coking & thermal from own assets
• Indonesia
- Thermal coal [ > 4000 kcal/kg (ARB)]
• South Africa
- Thermal Coal [ > 5500 kcal/kg(ARB)]
• USA
- Thermal Coal [ > 6000 kcal/kg(ARB)]
• Australia
- Thermal Coal [ > 5500 kcal/kg(ARB)]
19
Initiatives taken so far – Equity Model
Mozambique:
 2 coal blocks acquired in Mozambique , Area - 224 sq km
 Location – Moatize district, Tete Province
 Wholly owned subsidiary Coal India Africana Limitada registered in
Mozambique, Office opened in Tete in March 2012
 Team of senior officers posted
 Drilling started
20
Initiatives taken so far – Equity Model
South Africa:
 MoU signed with Provincial Govt. of Limpopo in 2011
 Strategic alliance for exploration and development of coal assets in
Limpopo Province
 Potential zones for coal resources identified
21
CIL Vision 2020, adopted by the Board of Coal India, makes
several fundamental suggestions to improve domestic supply
Recommendations
Key actions
• Increased delegation of power of a Multi-Tier Org spanning CIL level,
Subsidiary HQ and Project
• Specialized training (PMP certifications etc.) and full-staffing of all roles
• Modern way of working
• Attractive contract terms to encourage private sector participation, esp. those
with superior technologies and good practices
• Road-shows to attract potential partners (esp. in UG mining, exploration &
technical services etc.)
Investment in Logistics • Investment in last-mile connectivity
• Improvement of pit-head to siding infrastructure
• Creation of logistics as a separate function to build expertise
• Formation of suitable JVs to execute projects
Continuous
• Improvements linked to incentives to increase motivation for participation
Improvement Program • Large scale up-gradation of employee-skills to detect and report inefficiencies
• Strong knowledge management
Other Actions
• Flexibility and independence in setting R&R policies and land compensation
Suggested
• More thrust on mechanization and commercialization of R&D partnerships
• Focus on staffing of key roles (e.g. in E&F and L&R departments)
• Thrust on exploration etc.
Establishment of a
Project Management
Office (PMO) for large
future projects
Development of
Contractor Market
Actions being taken by Coal India to enhance domestic supply
•
•
•
•
•
•
•
•
Capacity augmentation by 180 MT planned during the 12th Plan period
Investment of Rs. 7500 Crores in Logistics over the next plan period
Road show for partners in UG Mining
New flexible R&R policy has been framed
Focus has been given on increased capacity of washed coal - tenders for 4
washeries (22.5 MT) out of 20 planned during the 12th plan completed
Special focus is being given to recruitment and back-fill of open positions in
critical departments
CIL is engaged with Governments to a greater degree to expedite various
clearances (PMO intervention sought for 178 clearances)
Pooling of coal prices may pave the way for linkage rationalization
THANK YOU
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