Good Bye 2016. A Peek Into How The Year Fared For India’s Coal Sector

India’s Coal Production Crosses 391 MT With An Growth of 1.6%During Apr-Nov 2016. After helping the exchequer save about Rs 20,000 crore in 2015-16, the coal ministry saved Rs 4,844 crore in the first four months of the current year.

Good Bye 2016. A Peek Into How The Year Fared For India’s Coal Sector

Anupama Airy

With a special emphasis of enhanced coal production and bringing down India’s dependence on imported coal, production of raw coal in the country during April-November of 2016-17 was in excess of 391 MT compared to 385.11 Mte during the corresponding period of previous year and the overall growth in Coal production during the period stood at 1.6 %.

The Coal Ministry under Union minister Piyush Goyal, also the minister of power, MNRE and mines, through out the year continued with its focus to decrease coal imports in the country. As a result, a further replacement of 15.37 MT of imported coal quantity is expected by March 2017. After helping the exchequer save about Rs 20,000 crore in 2015-16, the coal ministry saved Rs 4,844 crore in the first four months of the current year.

Lignite mining capacity of NLC is 30.6 Million Tonnes per annum as on 30.11.2016. The company  has enhanced its power generating capacity from 4275.50 MW (as on March 2016) to 4293.50 MW inclusive of 10 MW Solar and 43.50 MW wind power.

CIL coal production and off-take (during April-November 2016)

Item of work Apr-Nov. 2016 Apr-Nov 2016 Increase in absolute term Growth
Production of CIL (in Million tonnes) 323.64 321.37 2.7 0.7%
Dispatch of CIL (in Million tonnes) 340.03 340.89 -0.86 -0.3%

COAL IMPORT SUBSTITUTION:

The coal production by the coal companies has grown at a healthy rate of 9% and sufficient coal was available to be self-reliant and save foreign exchange by substituting imported coal with domestic coal. The country has saved about Rs 20,000 crore in the year 2015-16 and about Rs.4,844 crore in the first four months of the current year. The efforts on this front would lead to a further replacement of 15.37 MT of imported coal quantity by March 2017.

Month Wise Import of Coal   during 2016-17compared  2015-16 are given as under:
(Quantity in Mte & Value in Rs Crore )
        2016-17 (Provisional)              2015-16 Growth% Growth%
Month Quantity Value Quantity Value in Qty in Value
April’16 18.63 6882 19.02 9050 -2.04 -23.95
May’16 18.73 7153 19.02 8920 -1.53 -19.81
June’16 18.92 7647 18.14 8245 4.28 -7.26
July ’16 16.72 6944 14.77 6935 13.15 0.14
August’16 15.79 6959 14.84 6671 6.44 4.32
September’16 15.05 7065 13.78 6374 9.25 10.84
October’16 15.37 7775 16.63 7321 -7.57 6.20
April-Oct’ 16 (Total) 119.22 50425 116.21 53515 2.59 -5.78
Source : DGCI&S : Provisional and subject to change

However, poor lifting of coal by some of the power utilities, particularly those located far away from the mines, and less demand of higher grade coal at SECL has affected the performance.

Due to high growth in production of coal witnessed during 2015-16, the thermal power plants were flushed with a coal stock of 27 days of coal as on 1st April 2016. CIL started the current financial year (2016-17) with an opening stock of 57.7 MT. This has resulted in the problem of accumulation of coal stocks at the pitheads.

Special measures such as spot e- auction and linkage rationalization were undertaken to clear the accumulated stock of coal. Thus, during April-Nov. 2016, as against the production of 323.64 MT, 340.03 MT was dispatched by CIL.

Sporadic Law & Order problem at MCL & CCL have also affected production and offtake.

This year also witnessed a very heavy rainfall in most of the coal mining areas resulting in steep deceleration of growth in the production of coal between June and September.

All India Month Wise Progressive Coal Production (in Million tonnes)  
April Till May Till June Till  July Till  August Till  Sep Till  Oct till

Nov

2016-17 (Till Nov.) 48.370 100.524 152.723 196.824 236.328 278.761 330.647 391.11
2015-16(Till Nov.) 48.638 98.177 144.862 187.053 230.748 275.804 327.912 385.11

There are other specific reasons affecting dispatch as enumerated below:

  • Many of the cement plants, traditional users of higher grades of coal of Korea-Rewa coalfields of SECL switched over to Pet-coke.
  • Less demand of coal at sources with high logistics cost
  • Transportation bottleneck in some mines, etc.

Then in line with the Prime Minister’s Digital India Initiative, Coal Ministry fully implemented e -office application in October 2016 and the entire file work in the Ministry is now being done electronically. Digitization process has brought transparency and efficiency in the working of the Ministry as it would facilitate quick processing and instant movement of files thus enabling seamless and fast decision making. It would also enable quick retrieval of files/records and prevent loss/misplacing of files/records.

MOVING AHEAD WITH TECHNOLOGY

A new Web Portal related to Coal Allocation Monitoring System (CAMS) for Small and Medium Sector consumers of Coal India Limited (CIL) was launched by Minister (I/C) for Coal, Power, New and Renewable Energy on 17th March, 2016 at New Delhi for ease of business and to bring transparency in distribution of coal to SME sectors.

The Coal Mitra Web Portal has been designed to bring about flexibility in Utilization of Domestic Coal by transferring the reserves to more cost efficient State/Centre owned or Private sector generating stations, leading to lower generation costs and ultimately lesser cost of electricity for the consumers. The web portal would be used by the State/Central Gencos to display information about normative fixed and variable charges of electricity for the previous month as well as margin available for additional generation so as to enable the utilities identifies stations for transfer of coal. It would host data on Operational and Financial parameters of each coal based station; Quantity and source of supply coal to the power plant; and Distance of Power plant form the Coal mine.

During the year under review, several major IT initiatives were taken namely introduction of e-services in CMPFO via Direct Benefit Transfer (DBT), Computerization in CMPFO – e-services (In-House Development), Treating Aadhaar Number as CMPF Account Number, Coverage Of Contract Workers Under CMPF Scheme, Revamping Of Grievance Redress System and Self Certified Life Certificate For Hassle Free Pension.

Revenue Stream:

The Government has already taken several steps to further push the progress made by Coal Ministry in the last year. In line with the Coal mines auctions of 2015, the auction and allotment proceeds from 83 coal mines allocated so far and estimated at more than Rs 3.95 lakh crore over the life of the mine / lease period, which shall be devolving entirely to the coal bearing States.

The actual revenue generated from these coal mines up to Oct’16 is 2,779 crore (excluding Royalty, Cess and Taxes). The benefit to consumers in terms of reduction of electricity tariff from auction of 9 coal blocks to ‘Power’ Sector is likely to be about Rs. 69,310.97 crore. 

Under the provisions of ‘Auction by Competitive Bidding of Coal Mine Rules, 2012’, 5 coal blocks were allocated to Government Companies / Corporations for the end use power and 2 coal blocks for commercial mining during the period Jan’16-Nov’16. The Coal Block Development and Production Agreement have been signed by the Central Government with the allottee company in respect of 4 coal blocks for end use power.

During the same period, 3 lignite blocks were allocated to the entities of State of Gujarat. Out of these, 1 lignite block has been allocated for end use power and Lignite Block Development and Production Agreement has also been signed by the Central Government with the allottee company. The remaining 2 lignite blocks were allocated for commercial mining.

Under Rule 4 of the Auction by Competitive Bidding of Coal Mines Rules, 2012, Notice inviting applications had been issued in respect of 7 coal blocks for allotment to Government companies / Corporations of 6 States.

FURTHER RATIONALIZATION OF COAL LINKAGES AND IMPLEMENTATION OF 3 PHASE PROGRESS

The Inter-Ministerial Task Force, constituted in June, 2014 for a comprehensive review of existing coal sources as also feasibility for rationalization of these sources with a view to optimize transportation cost and that held several rounds of meetings with representatives from Ministry of Coal, Power, Railways, Steel, Shipping, DIPP, CEA, NTPC, CIL, SCCL, Subsidiary coal companies and KPMG.

Coal Linkage rationalization in power sector has resulted in decrease in transportation cost of coal from the mines to the power plants leading to more efficient coal based generation of power. The coal linkages have been allocated as per availability of coal from different mines. As a part of rationalization exercise, 29.818 MT of coal linkages having a potential annual saving of Rs. 1,512.85 crore were rationalized till the year 2015-16. In this year, further rationalization exercise was carried out by CIL with NTPC for rationalization of intra-NTPC plants and its JVs.

This rationalization of ACQ of 8.05 MT from rail fed TPPs to Pithead TPPs resulted in potential annual saving of Rs. 800 crore. 1.459 MT of coal quantity of UP State was rationalized leading to a potential annual saving of Rs. 60.15 crore. CIL has also rationalized 1 MT coal quantity of three units of Maharashtra State (Mahagenco) resulting in a potential annual saving of Rs. 90.57 crores.

In an innovative move, the government has allowed public and private power producers to swap their coal supplies with a view to reducing the cost of electricity by ensuring more efficient fuel usage. It may eventually extend the facility to other coal-consuming industries. Swapping between private and state entities is also aimed at improving the consumption of domestic coal by the industry , mainly the power sector, against the backdrop of high production and tapering demand on the back of reduced traction for power plants.

REGULAR ASSESSMENT OF MARKET REQUIREMENT OF COAL ESPECIALLY FOR SMALL USERS

The medium and the small scale industries, whose requirement is less than 4200 tons per annum, are required to take coal through the State Nominated Agencies under the New Coal Distribution Policy (NCDP), 2007. The same has been amended for upward revision on 27.09.2016 from 4200 tons per annum to 10,000 tons per annum and the phrase of small and medium sector, as mentioned in NCDP, 2007 has been amended as small, medium and others. An aggregate of eight million ton of coal per annum is earmarked for distribution to small scale, medium scale and other industries and the same has been divided amongst various States/UTs depending on past trends.

TRANSPARENT ALLOCATION OF COAL LINKAGES.

First tranche of auction for linkages of non-regulated sector i.e Sponge-Iron, Cement, CPP and other sectors has been completed. CIL is also doing preparatory work for linkage auction of coking coal.

ALTERNATIVE DISPUTES RESOLUTION MECHANISM (ADRM)

Ministry of Coal has constituted an Alternative Disputes Resolution Mechanism (ADRM) forum comprising one Joint Secretary of MOC and one Secretary level officer from the concerned State to resolve the disputes between State power utilities and CIL and its subsidiaries.

Since January, 2016, UP, Chhattisgarh, Punjab, Maharashtra, Rajasthan and Haryana have participated in the ADRM and the ADRM Committee has resolved a total no. of 58 disputes between State power utilities and CIL /its subsidiaries.

COAL MINES PROVIDENT FUND ORGANISATION (CMPFO)

From January to September 2016, a total of 24928 provident fund claims were settled out of 24976. During the period from 1st January, 2016 to 30th September, 2016, a total of 25,134 pension claims were settled and disposed of.

Introduction Of E-Services In CMPFO: Several technological advances have been made for introducing e-services in CMPFO in line with EPFO like:

  1. Direct Benefit Transfer (DBT):

National Committee on Direct Cash Transfer had decided to rollout Direct Benefit Transfer (DBT) from 1st January 2013. Keeping this spirit, from 01st August 2016 all the of PF and pension payments have been made mandatory to the members’ account on line through RTGS/NEFT. Cheque payment system has been totally dispensed with.

  1. B) Computerization In CMPFO – e-services (In-House Development)

Mobile App – A Mobile App has been developed by CMPFO for its subscribers. Members can view their PF Balances, Claim Status, Grievance status, etc.

  1. C)  Treating Aadhaar Number As CMPF Account Number

For this purpose, CMPFO has executed an agreement with UIDAI as AUA (Authentication user agency) and with NSDL for e-KYC services for verification of Aadhaar number of CMPF members as well as pensioners which will help CMPFO in implementing online payment to the members and direct benefit to CMPF pensioners. 

  1. D)  Coverage Of Contract Workers Under CMPF Scheme

Sub- registration of 3317 contractors has been made and now 79579 contract workers stand covered under the CMPF Act & Scheme as on 30.09.2016.

  1. E) Self Certified Life Certificate For Hassle Free Pension

Revised format of self-certified Life Certificate has been uploaded in the CMPFO web-portal. A pensioner can download the life certificate and submit to the concerned bank by self-attesting the same and need not seek the attestation of a gazetted officer.

  1. F) Revamping Of Grievance Redressal System

Grievance Redressal and social media Cell has been created directly attached to the commissioner to monitor and expedite the resolution of grievances, Facebook and twitter account. A senior officer of the rank of Regional Commissioner has been posted to head the Grievance and Pension disbursement section.  Provisions have been made for registration of grievances and feedback in the website of the organisation.

NLC India Limited (NLCIL):

Lignite mining capacity of NLCIL as on 30.11.2016 is 30.6 Million Tonnes per annum. It has enhanced its power generating capacity from 4275.50 MW (as on March 2016) to 4293.50 MW inclusive of 10 MW Solar and 43.50 MW wind power.

NLCIL has plans to enhance its Lignite production capacity from 30.60 MTPA to 54.40 MTPA by and has been allocated with two coal blocks of total capacity 31.5 MTPA for its upcoming coal based power projects. NLCIL has set high growth target to become a 19651 MW power generation company by 2025 with its own fuel security from its Lignite and Coal mines.

SKILL DEVELOPMENT IN NLCIL (Jan-Nov 2016)

NLCIL is committed to implementation of the common norms in the Skill Development. Under apprentice scheme (Apprentices Act,1961) an all-out efforts are being made for upgradation and development of skilled manpower in line with skill India Mission launched by our Hon’ble Prime Minister.

NLCIL has a separate division for Apprenticeship Training Scheme at its training unit, Learning and Development center and runs an ITI at its Barsingsar Unit in Rajasthan. The total strength of apprentices engaged in NLCIL is 1089 which is 3.7% of the 15,668 employee strength and 13,144 contract labour in NLCIL.

In line with the Skill India Mission of GOI, NLCIL has started a Diploma Course in Mining Engineering in collaboration with Annamalai University, Chidambaram, Tamilnadu from the academic year 2016-17 with a batch strength of 120 students per year. Among the 120 seats, 60 seats are reserved for the wards of Project Affected Persons of NLCIL.

During January to November-2016, 108 personnel (45 men and 63 women of Project Affected Persons (PAPs) were imparted skill development programme.

CORPORATE SOCIAL RESPONSIBILITY

NLCIL has allocated Rs 29.00 Crore from CSR Budget for water resource augmentation works towards flood control and irrigation for carrying out de-silting and widening of “Sengal Odai” and “Middle Paravanar Odai” for a total length of around 15.60 KM which will benefit approximately 8100 Acres of ayacut covering almost 50 villages in the peripheral areas of Neyveli in Cuddalore District. The works are being executed.

NLCIL effectively carried out various CSR activities/programmes insisting Cleanliness, Sanitation, Hygiene in various places including Heritage Sites, factory premises under Swachh Bharath Mission in four Swachh Packwada.

Leave a Reply

Your email address will not be published.