Report Summary

India is the third-largest producer and consumer of coal in the world. With proven reserves of 257.38 billion (Bn) tonnes, coal is one of the most abundant sources of energy in the country. In 2007, coal accounted for 51 percent of the primary energy consumed in the country.

The coal industry is a highly-regulated industry which gives it a monopolistic character. Only government-owned/managed/controlled companies are eligible to mine and trade coal without the restriction of captive consumption. Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) account for nearly 92 percent of the total coal produced in the country.

The industry is also characterized by inelastic demand. The technologies prevailing in the major coal-consuming sectors like power, steel and cement are coal-based, thus rendering the substitutability of coal as a fuel in these industries difficult at least in the near future.
Coal mining is fraught with high risk, making safety issues critical for the industry. In addition, as mining has tremendous impact on the environment, clearances need to be obtained before mining can be initiated.

Though India has the fourth-largest proven coal reserves in the world, Indian coal is of poor quality. Nearly 83 percent of the Indian coal is of non-coking variety with high ash content. Of the 456.4 million (Mn) tonnes of coal produced in FY08; power, steel and cement sectors accounted for 75 percent, 4 percent and 3 percent, of the offtake respectively. The domestic offtake by the power and cement sectors have grown at a CAGR of 6.79 percent and 4.03 percent, respectively during the last five years while that by the steel sector has seen a decline of 2.03 percent during the last five years.

The offtake of coal by different sectors is governed by coal distribution policy. In October 2007, the new coal distribution policy was introduced. As per this policy, 100 percent requirement of sectors like power (non-captive), fertilizer, defence and railways will be met at pre-determined prices. For other sectors, 75 percent of the requirement will be met at the pre-determined prices. Companies having an annual requirement of more than 4,200 tonnes will need to enter into Fuel Supply Agreements (FSAs) with CIL/subsidiary companies while others will need to enter into FSA with agencies as notified by the state government. E-auction of coal has been reintroduced for the benefit of small consumers who cannot enter into long-term contract due to small requirements.

In FY08, India imported approximately 50 Mn tonnes of coal, of which coking coal constituted 57 percent. The major source of imported coking coal is Australia while for non coking coal Indonesia is the dominant source. The close proximity of Indonesia with India compared to other source countries gives Indonesian coal a freight advantage over others. India also exports a miniscule amount of coal to countries like Nepal, Bangladesh and Bhutan.
Demand Growth
As per the Expert Committee on Road Map for Coal Sector Reforms, a shortfall of 100 Mn tonnes of thermal coal is expected in the country by the end of FY12. To meet this demand-supply gap, the Government is looking at various alternatives e.g. FDI, acquisition of overseas coal block, captive mining, faster project approvals, better technology etc.

An area which calls for major improvement is coal logistics, in both rail and port. At present, both rail and port infrastructure are severely stretched, with the average waiting time at the Indian ports reaching 4.12 days and 4.89 days in FY07 for non-coking and coking coal, respectively. Coal beneficiation is being encouraged to release the already stretched railway capacities.

Report Outline

Chapter 1 Introduction
1.1 Coal formation
1.2 Types of coal
1.3 Importance of coal
1.4 Uses of coal

Chapter 2 Coal mining methods
2.1 Surface mining
2.2 Underground mining
2.2.1 Room and Pillar method
2.2.2 Longwall Mining method
2.3 Coal mining methods in India

Chapter 3 Coal mining in India
3.1 Evolution
3.1.1 Nationalization on coal mines
3.2 Current industry structure

Chapter 4 Industry characteristics
4.1 Highly regulated
4.2 Monopolistic
4.3 Inelastic demand
4.4 Seasonal supply
4.5 Highly risky
4.6 Environmental issue
4.7 Duty structure

Chapter 5 Regulations
5.1 Coal distribution
5.1.1 Current coal distribution policy
5.1.2 Coal distribution prior to October 2007
5.2 Coal pricing & trade

Chapter 6 Global demand supply position
6.1 Global supply
6.1.1 World coal reserves
6.1.2 World coal production
6.2 World coal consumption
6.3 Major coal exporting/importing countries

Chapter 7 Domestic coal supply
7.1 Domestic coal reserve
7.2 Type wise & category-wise coal resources
7.3 Major coal producers in India

Chapter 8 Domestic coal demand
8.1 Offtake of coal
8.2 Sector -wise coal offtake
8.2.1 Demand from power sector
8.2.2 Demand from steel sector
8.2.3 Demand from cement sector
8.3 Import of coal
8.3.1 Coking coal imports
8.3.2 Non coking coal imports
8.4 Export of coal
8.5 Coal logistics
8.5.1 Modes of coal transportation
8.5.2 Cargo handling at Indian ports- Coal
8.5.3 Transportation cost

Chapter 9 Industry outlook
9.1 Demand projection
9.1.1 Projected coal requirement of the power sector
9.1.2 Projected coal requirement of the steel sector
9.1.3 Projected coal requirement of the cement sector
9.1.4 Total coal requirement of all sectors
9.2 Demand vis-¨¤-vis availability as per 'Coal Vision 2025'
9.3 Demand vis-¨¤-vis availability as per 'Expert committee
road map on coal sector reforms'

Chapter 10 Challenges & Road Ahead
10.1 Meeting demand-supply gap
10.2 Bringing better technology
10.3 Promoting clean coal technologies
10.3.1 Coal beneficiation
10.3.2 CBM related activities
10.3.3 Underground coal gasification (UCG) related activities
10.3.4 Coal liquefaction related activities
10.4 Reducing coal cost
10.5 Improving mine safety
10.6 SWOT analysis of the industry

Chapter 11 Major players
Annexure I Definition
Annexure II State-wise distribution of coal reserve
Annexure III Grades of coal
Annexure IV Trends of fatal & serious accidents in CIL coal mines in India
Annexure V Labour productivity
Annexure VI Sector-wise allocation of coal blocks (Dec 07)
Annexure VII Abbreviations

Figures

Figure 1.1 Formation of coal
Figure 1.2 Types of coal
Figure 1.3 Price predictability
Figure 1.4 Prime energy consumption
Figure 2.1 Coal mining methods
Figure 2.2 Room & Pillar mining
Figure 2.3 Longwall mining
Figure 3.1 Industry structure
Figure 4.1 Pit head closing stock of raw coal FY07
Figure 4.2 Trends in custom duty & Import of non-coking coal
Figure 4.3 Trends in custom duty & import of coking coal
Figure 5.1 Domestic coal price
Figure 6.1 Estimated recoverable coal reserves
Figure 6.2 Major coal producing countries
Figure 6.3 Major coal consuming countries
Figure 6.4 World coking coal export growth
Figure 6.5 Major HCC/ SSCC Suppliers (2000-2006)
Figure 6.6 Major coking coal exporters
Figure 7.1 Geographical distribution of coal reserves in India
Figure 7.2 Coal & Lignite resource in India
Figure 7.3 Proved coal reserves in India
Figure 7.4 Trend in production of coking & non ¨C coking Coal
Figure 7.5 Source-wise coal production
Figure 8.1 Sector-wise offtake of coal
Figure 8.2 Mode-wise breakup of installed capacity & electricity generation in India FY 08
Figure 8.3 Offtake of coal to the power sector
Figure 8.4 Domestic crude steel production & coal offtake to the steel sector
Figure 8.5 Total import of coking coal in India
Figure 8.6 Total Coal imports
Figure 8.7 Indian metallurgical coal imports by source FY07
Figure 8.8 Indian non-coking coal imports by source FY07
Figure 8.9 China's coal exports & imports
Figure 8.10 Modes of coal transportation in India
Figure 8.11 Type-wise coal handled at the Indian ports
Figure 11.1 Total annual production of CIL subsidiaries
Figure 11.2 Annual production of CIL subsidiaries by type of mine
Figure 11.3 Labour productivity of CIL subsidiaries
Figure 11.4 PAT of CIL subsidiaries

Tables

Table 1.1 Sustained availability
Table 1.2 Percentage of Coal¨Cbased electricity generation out of total electricity generated.
Table 3.1 Company ¨Cwise production for FY08
Table 4.1 Comparison of coal v/s other fuels
Table 4.2 Duty structure on imported coal FY09
Table 6.1 World recoverable/ proved Coal Reserve
Table 6.2 World coal production
Table 6.3 World coal consumption
Table 7.1 Coal reserves of India
Table 7.2 Type-wise and category-wise coal resources
Table 8.1 Sector-wise offtake of coal
Table 8.2 Indonesia 's coal export potential
Table 8.3 South Africa coal export potential
Table 8.4 Australia's coal export potential
Table 8.5 Coal exports from India
Table 8.6 Coal traffic at major ports in India
Table 8.7 The average turnaround time for coal at the major ports in India
Table 9.1 Crude steel production (National Steel Policy)
Table 9.2 Projected non-coking demand from non captive power utilities
Table 9.3 Projected non-coking demand from captive power utilities
Table 9.4 Projected requirements of coking coal of the steel sector
Table 9.5 Non-coking coal demand from sponge iron producers (FY03-07)
Table 9.6 Projected requirements of non-coking coal by the sponge iron producers
Table 9.7 Projected non-coking coal requirement of cement sector
Table 9.8 Total coal requirement of all sectors
Table 9.9 Demand vis-¨¤-vis Availability as per "Coal Vision 2025"
Table 9.10 Demand vis-¨¤-vis Availability as per the Expert Committee onRoad Map for Coal Sector Reforms
Table 10.1 Present Coal Beneficiation Capacity
Table 11.1 Bharat Coking Coal Ltd. (BCCL) Financials
Table 11.2 Eastern Coalfields Ltd. (ECL) Financials
Table 11.3 Central Coalfields Ltd. (CCL) Financials
Table 11.4 Northern Coalfield Ltd. (NCL) Financials
Table 11.5 Western Coalfields Ltd. (WCL) Financials
Table 11.6 South Eastern Coalfields Ltd. (SECL) Financials
Table 11.7 Mahanadi Coalfields Ltd. (MCL) Financials
Table 11.8 North Eastern Coalfields Ltd. (NEC) / CIL Financials
Table 11.9 Singareni Collieries Company Ltd. (SCCL) Financials