Coal India Limited (CIL), a Maharatna company, is the single largest coal producer in the world and one of the largest corporate employers. S. N. Tiwary, Director (Marketing), CIL spoke to BE’s Ellora De.
Q. India still imports a huge amount of coal. How are you addressing this issue?
A. Coal India is pursuing the necessary measures to increase domestic coal production and become self-reliant in meeting the demand internally. The effort is to reduce import dependency to the extent possible. However, the country’s limited geological reserves of coking coal, used in steel making, coupled with non-feasibility of its techno-commercial extraction prompts coal import for this type of coal. Basically, coal import in India is done by coastal based thermal power plants which have the benefit of lower logistic costs. Evidently, the domestic demand for coal is outstripping the indigenous rate of production. As a consequence, the gap between demand and supply is being met to some extent by imports. From its side, CIL is taking pro-active steps like supplying higher grade coal as a substitute for imported coal to all consumers.
Q. International coal price is higher as compared to the domestic rates. How are you looking at this?
A. Coal India ensures that the domestic coal price remains competitive to consumers compared to imported coal. The landed price of domestic coal varies significantly depending upon the distance hauled due to transportation costs, taxes and levies. Only a certain percentage of coal is supplied under e-auction and linkage auction where it is supplied at the market driven price.
Q. What are the initiatives aimed to improve coal linkage to power plants?
A. The introduction of Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) in 2017 was an important initiative to address the power stations stranded for the want of coal linkages. SHAKTI is broadly classified in two sections. Firstly, a road map was drawn to provide linkages to all pending Letters of Assurances (LOA) issued by CIL in New Coal Distribution policy regime. The second section of SHAKTI dealt with various windows for different categories of private power plants to secure coal linkages. For the first time, the concept of auction of linkages was based on the benefit of electricity tariff which was being passed on to end consumers. In two rounds of tariff based auction for awarding linkage, CIL has granted long term linkage of about 30 MTPA (million tonnes per annum).
Q. What are the future initiatives to improve coal linkage to thermal power plants?
A. As a result of further amendment to SHAKTI policy in 2019, few more avenues have opened up for improved coal linkage to thermal power plants. Linkage for short term sale of power through a transparent bidding mechanism - Discovery of Efficient Energy Price (DEEP) and Day Ahead Market (DAM) through power exchanges has been introduced. The implementation process is on and it is expected to further improve the issue of coal linkages to power producers.
Q. Currently, how many mines are under your operation?
A. There are 364 operational mines with Coal India (as of April 1, 2019) of which 166 are underground, 180 open and the rest 18 are mixed mines.
Q. What is the year by year growth data?
A. We have, for the first time, breached the 600 million tonne mark in coal production and off-take ending FY 2019, clocking growths of 7% and 4.8% respectively. While the coal production was 607 MTs against achieving 99.5% of the target, the off-take was 608 MTs - 99.7% of the target. The 7% growth in coal production achieved during 2018-19 was almost a three-fold increase compared to previous fiscalʼs output growth of 2.4%.
Scripting a new high in coal supplies to thermal power plants, ending FY 2019, CIL’s sources supplied 491 MTs of coal against 454 MTs supplied in the previous fiscal. Importantly, as of April 1, 2019 there was not a single coal fired power plant in the country in the critical or the supercritical list (for the want of coal).
Q. How is CIL’s export market?
A. Currently, we are not exporting any coal. However, in an endeavour to broaden the market base, CIL is exploring overseas markets, particularly the neighbouring countries. Expert advice, in terms of commercial feasibility, is being sought to formulate a footprint in the export market.
Q. What are the measures taken by CIL to safeguard the environment?
A. Coal mining is a fight against nature and certain adverse effects to nature is inevitable. Coal India is fully conscious of minimising these effects to the extent possible. CIL has put in place various steps for safeguarding environment. Mine planning is carried out integrating environmental concerns by using MINEX software. All our operations, systems and processes are meticulously planned and designed with due regard to safety, conservation, sustainable development and environment. Coal India tries its best to bring back the green cover over its mined out areas by massive tree plantations. Coal companies of CIL have reclaimed 957 hectare of land with plantation of 2.17 million saplings during 2018-19. Till March 31, 2019 a total of around 98.18 million trees have been planted, covering an area of 39,336 hectares.
In another thrust towards green initiative, in ‘first mile connectivity’, Coal India will switch over to mechanised coal transportation through piped conveyor belts in its large mines by 2023-24, replacing the existing road transport of coal. 35 coal projects, each having production capacity of four million tonne per annum and above, have been identified for the purpose of promoting environment safety.
Q. How does CIL carry corporate social responsibilities?
A. As a leading PSU of the country, Coal India is aware of its corporate citizenry role and the responsibility towards society. CIL reaches out to the marginalised sections of the society through a well-defined Corporate Social Responsibility (CSR) policy to bring about quality improvement in their lives. CIL’s CSR activities largely encompass education, rural development, health care, women empowerment, water supply, roads, skill development, sports etc. CSR spend of CIL is among the top in the country. CIL spent Rs. 416.47 crore in CSR activities during 2018-19. As a part of Swachh Bharat Abhiyan, introduced by the Government of India, CIL constructed and renovated a total of 53,412 toilets in schools and public places.