A Brief History of Coal Mining and Coal Deposits in India

A Brief History of Coal Mining and Coal Deposits in India
CHAPTER 3
A BRIEF HISTORY OF COAL MINING AND COAL DEPOSITS IN
INDIA
Introduction
In the previous Chapter, we have described the important studies conducted in our
research field that we have extensively surveyed and examined for the purpose of our
study. We have also pointed out the research gap to justify our investigation. Now the
present Chapter provides a fascinating description of the historical background of coal
industry in India, nationalization of coalmines and formation of Coal India Limited and
its subsidiaries including Eastern Coalfields Limited. We have also portrayed here Indian
and Global coal scenario and the position of our country in the international field with
regard to coal deposits and future prospect of this vital energy source. The whole matter is
presented in the following sections:
3.1 A Brief History of Coal Mining in India
Historical records show that even in ancient times people used metals and alloys for their
daily living. The Asoka-Pillar, the Pillar in the Kutub-Minar and development of the
Cannons in the early historical period provide ample proofs of the use of molten iron in
ancient times and medieval India. At that time coal was used for melting metals. The
ruins of smithy furnaces and slack hips close to the coal deposits in the Eastern regions
indicate that the coal was used in the metallurgical processing even as early as 2000 years
ago. Ancient scriptures suggest that the name of the Damodar, the main river in the
Eastern India, on the banks of which the reserve of coal is abundant has its origin in the
phrase Dam- Udare-Jahar, i.e. fire in the belly. The names of some villages like
Angarpathra (pot of burnt coal), Kalipahari (Black Mountain) near Asansol in the Eastern
region suggest the existence of coal deposits in these areas and confirm previous
knowledge of the people of these areas in the presence of underground coal deposits long
before the mining operations began. Thus, there are evidences that coal was known as
fuel resource in India. However, there was no record or documentation regarding the coal
industry until the middle of the18th century. Some records show that as far back as in
1774-75 shallow mines were used to be operated first in Raniganj fields of West Bengal,
which is considered the birthplace of coal mining in the Country. 1
44
A systematic survey of coalmines was conducted in 1845-46 and again in 1860, when it
was found that there were about fifty collieries in the area producing 28,200 tonnes of
coal. At first, coal mining was limited to the Raniganj Coalfields but during the later part
of the 19th Century, exploration started elsewhere in the country. At the beginning of the
20th century, coal production in India reached 6 million tonnes. During the First World
War period, increased demand for coal gave impetus to the development of coal industry.
In 1919, the production of coal rose to 21 million tonnes. In subsequent years, the
industry suffered a setback due to great depression just after the World War 1. 2
The years from 1937 to 1942 constituted another important period, when international
demand for coal steadily rose. Meanwhile, quite a number of quarries and pits were
operated in the Raniganj, Orissa, and Madhya Pradesh Coalfields. The Coal Mining
Committee set up by the Imperial Govt., submitted their report in 1936 on the measures
for securing safety and preventing waste of available coal. In the year 1945, the Singareni
Collieries Company Limited (SCCL) was formed as the first Government owned Coal
Company in the country. In that year, Government of Nizam of Hyderabad bought all the
shares of the company and brought the company under India Trust Fund of the Niza m
Government. The said company actually started production in 1889 at Yellandu area of
present Andhra Pradesh and raised 60,000 tonnes of coal in that year. 3
In 1947, India achieved its independence. Subsequently Five Year Plans were launched
with ambitious targets of coal production. Realizing the importance of coal to the
development of India, our motherland, National Coal Development Corporation (NCDC)
was set up in 1956. Most collieries belonging to the Indian Railways were transferred to
the NCDC to bring about rationalization in coal industry. NCDC brought a major change
in the lives of the coal miners and their standard of living. In 1960, coal industry suffered
a setback in as much as demand could not consume supply. This was due to slippages in
achieving targets by steel, power and other industries. During the sixties, the coal industry
passed through a period of cheap availability of oil. The situation, however, took a radical
turn in the seventies due to spiraling up of oil prices resulting in hike in coal demand. The
Central Government took the decision to bring coalmines under the State Control. This
was the last phase of coal industry in the hands of the private owners. It is important to
note that at that time the private owners were producing nearly 75 percent of the total coal
45
production. There was a complete anarchy and chaos in the production and distribution of
coal in spite of increase in demand for coal.
Considering the above facts and for proper safety and security of the miners, conservation
of coal, and systematic mining to meet increasing demand of coal especially from Iron
and Steel companies and power (thermal) companies, the Government of India, on
October 16, 1971, promulgated the Coking Coal Mines (Emergency Provisions) Act,
1971. Thereafter, Government of India took over the management of all 226 coking
coalmines except captive mines of IISCO, TISCO and DVC, subsequently nationalized
them on May 1, 1972, and brought under the control of newly formed Bharat Coking
Coal Limited (BCCL) to look after the coking coalmines and for streamlining its
production. Consequently, the private owners of non-coking coalmines stopped further
investment and started violating the safety laws and underpaying workers for short-term
gain, as they were afraid of further nationalization of non-coking coal mines very soon.
Thus, keeping all these factors in consideration Government took over the management of
all 711 non-coking coalmines of the country, then operating, on January 30, 1973 and
subsequently nationalized them on May 1, 1973 and thus a new era began. In order to
provide for a higher growth in coal sector to meet the growing energy needs of the
country, the Government nationalized coalmines by enacting through the Parliament the
Coal Mines Nationalization Act in 1973. The section III of the Act says, No person,
other than the Central Government or a Government Company or a Corporation owned,
managed or controlled by the Central Government shall carry on coal mining operation in
India. Thereafter, pursuant to the nationalization of coalmines, all non-coking coalmines
were brought under Coal Mines Authority Limited (CMAL), which was incorporated as
a government company under the Companies Act 1956, on June 14, 1973, having three
divisions, Eastern Division, Western Division and Central Division. The CMAL was then
under the administrative control of the Department of Coal, Ministry of Energy,
Government of India.
On November 1, 1975, the Department of Coal, Ministry of Energy, and Government of
India incorporated the present Coal India Limited (CIL) as a holding company. The
objective was to integrate and streamline the structural set up and to bring both coking
and non-coking coalmines in one controlling unit that was to be responsible for the entire
coal mining sectors owned and controlled by the Central Government. Then BCCL and
46
all the three divisions of earlier CMAL were incorporated as Subsidiary companies of
CIL. Eastern Division of CMAL was converted into Eastern Coalfields Limited (ECL),
Western Division into Western Coalfields Limited (WCL) and Central Division into
Central Coalfields Limited (CCL). With that, one more subsidiary company called
Central Mine Planning and Design Institute Limited (CMPDIL) was incorporated for
planning, design and engineering consultancy services of the coalmines. Again, for the
better control of the mining operations and for enhancing production, few mines were
reorganized on January 1, 1986 and two new subsidiaries came into sight, one from WCL
called South Eastern Coalfields Limited (SECL) and another from CCL named as
Northern Coalfields Limited (NCL). Further reorganization took place on April 1992 and
again one more subsidiary came into existence from SECL named as Mahanadi
Coalfields Limited (MCL).This way, eight subsidiaries of Coal India Limited came into
existence. 4
3.2 The Chronological Sequence of Restructuring of Coal Industry in India

The Chronological sequence of restructuring of coal industry in India is presented in
Figure 3.1 in the next page showing the position of the present Coal India Limited (CIL),
the main coal producing public sector company in India and all the subsidiaries including
Eastern Coalfields Limited (ECL), the subsidiary selected for our research study. 5 Figure
3.1 shows that there are certain mines, which are beyond the control of CIL. These are:
1) Captive coking coal mines of Tata Iron & Steel Company Limited (TISCO),
2) Captive coking coal mines of Indian Iron & Steel Company Limited (IISCO),
3) Captive Non-coking coal mines of Damodar Valley Corporation (DVC),
4) Non-coking coalmines of Singareni Collieries Company Limited (SCCL), jointly
owned by Andhra Pradesh Government and Government of India with equity sharing
in the ratio of 51:49. 6
These are sequentially shown in Figure 3.1 in the next page and necessary explanations
are given after presentation of the Figure.
47
Figure 3.1: Chronological Sequence of Restructuring of Coal Industry in India

Source: Glimpses of Coal India (2006), CIL, Kolkata
Chronological Sequence of Restructuring of Coal Industry in India

Private Sector Mines.
Singareni
Collieries
Company
Ltd. (SCCL)
State Railways
Collieries.
Non-Coking
Coal.
Coking Coal.
Captive
Mines of
National Coal
Develoupment
Corporation
(NCDC) 1956.
DVC.
Non-Coking
Coal.
May, 1973
Non-Coking
Coalmines
Nationalized
May, 1972
Coking
Coalmines
Nationalized
Bharat
Coking Coal
Ltd. (BCCL)
Coal Mines
Authority
Ltd. (CMAL)
November, 1975, Formation of Coal

India Limited as Holding Company
North Eastern Coalfields (NEC)
ECL, BCCL, CCL, WCL,
CMPDIL
January 1, 1986 Reorganization
NEC
Dankuni Coal Complex (DCC)
ECL, BCCL, CCL, NCL,
WCL, SECL, CMPDIL
April, 1992 Further Reorganization
NEC
DCC
1945, SCCL
TISCO /
IISCO
ECL, BCCL, CCL, NCL, WCL,

SECL, MCL, CMPDIL
48
Figure 3.1 exhibits that the CIL, at present, has eight Indian Subsidiaries as discussed
afterwards. It has another subsidiary in Africa as is mentioned below. Out of these, eight
subsidiaries are producing companies whereas CMPDIL is an engineering, design and
exploration company for preparing perspective plans, rendering consultancy services and
undertaking exploration and drilling work for establishing coal reserves in the country.
CIL and its Indian subsidiaries are incorporated under the Companies Act, 1956 and are
wholly owned by the Central Government. The coal mines of Assam and its neighboring
areas are controlled directly by CIL under North Eastern Coalfields (NEC), a small coal
producing unit operating in Margherita, Assam and Dankuni Coal Complex (DCC) is a
low temperature carbonization plant in India leased out by CIL to SECL. The list of all
the subsidiaries of CIL is given below:
1) Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand;
2) Central Coalfields Limited (CCL), Ranchi, Jharkhand;
3) Eastern Coalfields Limited (ECL), Sanctoria, Asansol, West Bengal;
4) Mahanadi Coalfields Limited (MCL), Sambalpur, Orissa;
5) Northern Coalfields Limited (NCL), Singrauli, Madhya Pradesh;
6) South Eastern Coalfields Limited (SECL), Bilaspur, Chhattisgarh;
7) Western Coalfields Limited (WCL), Nagpur, Maharashtra.
8) Central Mine Planning and Design Institute Limited (CMPDIL), Ranchi, Jharkhand;
9) Coal India Africana Limited, Mozambique, Africa. ( an international subsidiary of
CIL)
Coal India Limited (CIL) is a Maharatna designated Public Sector Undertaking under
the Ministry of Coal, Government of India, which has its headquarters in Kolkata, West
Bengal. Coal India limited (CIL) is the single largest coal producing company in the
world, based on its raw coal production of 431.32 million tonnes in the fiscal ended 2011.
In fiscal 2009, coal produced by CIL accounted for 81.9 % of coal production of India.
The Coal India Limited (CIL) is the largest coal producing company and reserve holder in
the world.7
It is the second largest corporate body in the world and is the largest
corporate employer in India. It produces non-coking coal and coking coal of various
grades for diverse applications. The range of products includes raw coal (coking and noncoking), washed coal, soft coke & hard coke, coal tar, coal gas, coal chemicals etc. As on
March 31, 2010, CIL was operating 471 mines in 21 major coalfields across eight states
in India, including 163 open cast mines, 273 underground mines and 35 mixed mines
49
(includes both open cast and underground mines).
It was also operating 17 coal
beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million

tons per annum. It intends to develop additional 20-coal beneficiation facilities with an
aggregate additional proposed feedstock capacity of 111.10 million tonnes per annum.
Coal India's major consumers are the power and steel sectors. Others include cement,
fertilizer, brick kilns etc.
CIL had featured in FE 500 a Financial Express Research Bureau compilation brought
out by The Indian Express, daily news, in March 2011. In fact, CIL was among the
super league of top 10 firms and occupied a composite rank of 5th (for 2010). In terms of
Gross Profit CIL was ranked 5th and was among the top 10 in terms of market
capitalization.9
3.3 Coal Deposits in India
India is rich in coal deposits and occupies fourth position in global coal reserve after the
USA, Russia and China. According to Geological Survey of India (GSI), as on April 1,
2008 reserves of coal in India up to a depth of 1200 meters was 264.54 billion tonnes, of
which 28.5 percent and 24.7 percent were in the states of Jharkhand and Orissa
respectively whereas the remaining reserves were in other states as are discussed in the
latter part of this section. 10
There are different types of coal found in India and other countries. In general, coal is
classified into four categories. They usually range from lignite, through sub bituminous
and bituminous, to anthracite, reflecting the progressive response of individual deposits of
coal to increasing heat and pressure. The carbon content of coal supplies most of its
heating value, but other factors also influence the amount of energy it contains per unit of
weight. Lignite is a geologically young coal which has the lowest carbon content, 25-35
percent, and a heat value ranging between 4,000 and 8,300 BTUs ( British thermal units
which is used to express the amount of energy in coal) per-pound. Sometimes called
brown coal, it is mainly used for electric power generation. Bituminous coal is the most
plentiful form of coal available in the United States. This coal is used primarily to
generate electricity and make coke for the steel industry. Bituminous coal has a carbon
content ranging from 45 to 86 percent carbon and a heat value of 10,500 to 15,500 BTUs50
per-pound. Ranking below bituminous is subbituminous coal with 35-45 percent carbon
content and a heat value between 8,300 and 13,000 BTUs-per-pound. Reserves are
located mainly in a half-dozen Western states and Alaska. Although its heat value is
lower, this coal generally has a lower sulfur content than other types, which makes it
attractive for use because it is cleaner burning. The coal that has the highest carbon
content, between 86 and 98 percent, and a heat value of nearly 15,000 BTUs-per-pound is
called Anthracite coal. This coal is frequently associated with home heating and occupies
a very small segment of the U.S. coal market. There are 7.3 billion tons of anthracite
reserves in the United States and is found mostly in 11 North Eastern counties in
Pennsylvania.
The Indian coal deposits are primarily concentrated in the Gondwana sediments occurring
in the Eastern and Central parts of Peninsular India. The Indian coal mainly consists of
bituminous and sub-bituminous varieties that rank below anthracite variety, which is
regarded as the best kind of coal. In India, bituminous and sub bituminous coal is used
primarily to generate electricity and make coke for the steel industry. Further, the Tertiary
coal bearing sediments are also found in North-Eastern India, spreading over the states of
Assam, Arunachal Pradesh, Nagaland and Meghalaya of which the Assam Coalfields are
the prominent ones. Here coalfields are highly disturbed tectonically and with high
sulphur contents. 11
Based on availability, India mainly produces two types of coal. These are coking coal and
non-coking coal. Coking coals are those coals, when heated in the absence of air, form
coherent beads, free from volatiles, with strong and porous mass, called coke. Thus, these
coals have coking properties and are mainly used in steel making and metallurgical
industries. For that reason, these coals are also known as metallurgical coal. In contrast,
non-coking coals do not have such coking properties. These are mainly used as thermal
grade coal for power generation and also used for cement, fertilizer, glass, ceramic, paper,
chemical and brick manufacturing, and for other heating purposes.
Depending on the quality of coke produced from them, coking coal is sub-divided into
prime coking coal, medium coking coal and semi-coking coal. For example, semi-coking
coals have reasonably less coking properties than prime coking coals and moderately less
coking properties than medium coking coals. These coals are blended with coking coals
51
in adequate proportion to make coke. Thus, these are mainly used as blend-able coal in
steel making, merchant coke manufacturing and other metallurgical industries. Similarly,
non-coking coal is classified in seven grades (Grades A to G) depending on its
caloric values, which is exhibited in Table 3.1 below. Indian coal is, actually, categorized
based on Useful Heat Value (UHV) in case of non-coking (Steam) coal and based on ash
contents in case of coking coal. The useful value is calculated following the formula:
UHV= 8900-138 (A+M), where UHV means useful heat value in Kcal/Kg, A
indicates ash content in percentage and M indicates moisture content in percentage.
Similarly, gross calorific value (Kcal/Kg) is calculated following the formula, GCV =
91.7 F + 75.6 (V 0.1 A) 60M, where F, V, A and M denote moisture, ash, volatile matter
and fixed carbon all in percent air-dried, respectively.12
Price of coal, thus, varies according to their coking properties and further according to the
different grades of coal in case of non-coking coal. Prime coking coal fetches the highest
value as compared to the medium and semi- coking coal. Similarly, in case of non-coking
coal, grade A gets the highest value as compared to the other grades and so on. Thus,
the subsidiaries, which have more reserves of coking coal and higher grade of non-coking
coal, are in a better position to fetch better market price for their product. For example,
BCCL gets better prices by selling coking coal and ECL gets higher prices by selling noncoking coals from S.P mines and Raniganj coalfields as compared to other subsidiaries.
Table 3.1: Various Grades of Non-coking coals
Useful Heat Value (Kcal/Kg)

UHV= 8900-138 (A+M)
Exceeding 6,200
Gross Calorific Value (GCV) (Kcal/Kg)

(at 5% moisture level)
Exceeding 6,401
Exceeding 5,600 but not exceeding 6,200
Exceeding 4,800 but not Exceeding 5,401
Grade
Source: http:// www.coalindia.in

Now before providing total reserve of Indian coal in detail we would like to explain three
terms that are used to categorize that reserve. These are Proved Reserve, Indicated
52
Reserve and Inferred Reserve. The coal reserves that are not only considered recoverable
but can also be recovered economically are called Proved Reserves. Thus, a proven
recoverable reserve is the tonnage of coal that has been proved by drilling etc. and is
economically and technically extractable. This means they take into account what current
mining technology can achieve and the economics of recovery. For that reason, proved
reserves will change according to the price of coal; if the price of coal is low, proved
reserves will decrease. The estimate of the quantity of coal available in an area, which is
considered good, and the depth at which coal can be exploited is reasonable, is termed as
Indicated Reserve. Indicated reserves differ from proved reserves in the way that
indicated reserves are estimated with a lower degree of confidence than proved reserves.
The term Inferred Reserve refers to the rough estimate of the quantity of available coal
made during a survey, which is called regional survey. However, total coal resources
indicate the amount of coal that may be present in a deposit or coalfield. This does not
take into account the feasibility of mining the coal economically. Not all resources are
recoverable using current technology. 13
We have already mentioned that as per GSI compilation of reserves data as on April 1,
2008, total reserve of coal in India up to a depth of 1200 meters is 264.54 billion tonnes,
comprising proved, indicated & inferred categories, of which 28.5 percent and 24.7
percent are in the states of Jharkhand and Orissa respectively whereas the remaining
reserves are in other states. However, total coal reserves, as on April 1, 2007 was 257.38
billion tonnes. Thus, there is an increase in the reserve of coal as on April 1, 2008.
Further, out of these total reserves as on April 1, 2008 only 101.83 billion tonnes are of
proved category, 124.22 billion tonnes are indicated and remaining 38.49 billion tonnes
are of inferred category. While 4.6 billion tonnes of proved reserves belong to prime
coking category, other coking reserves are 12.3 billion tonnes. Proved reserves of noncoking coal increased from 81.6 billion tonnes as on April 1, 2007 to 84.4 billion tonnes
as on April 1, 2008.
In addition, Neyveli Lignite Corporation (NLC) coordinates and reviews the regional
exploration work concerning lignite reserves. Lignite is a low grade brown coloured
geologically young coal that has the lowest carbon content, 25-35 percent, and a heat
value ranging between 4,000 and 8,300 BTUs-per-pound. Because of its colour,
sometimes, this coal is called brown coal. This coal is mainly used for electric power
53
generation. Total lignite reserve in the country as on April 1, 2007 was 38.76 billion
tonnes, which further increased to 38.93 billion tonnes as on April 1, 2008. Out of the
total lignite reserves, Tamilnadu accounts for 31.33 billion tonnes (80.83 percent) while
Rajasthan accounts for 4.48 billion tonnes (11.6 percent). 14
Detailed data on Coal reserves excluding lignite reserve, up to a depth of 1200 meters as
on April 1, 2008, by type of Coal and by different coal bearing States are provided in
Tables 3.2 and 3.3 respectively whereas detailed data on lignite reserves are available in
Table 3.4.
Table 3.2 given below exhibits that Indian coal generally is of non-coking categories,
which is comparatively poorer than coking coal, but is mostly sought after item for power
sectors. Nonetheless, the country has a good amount of reserve in proved and indicated
categories giving a beneficial position for electricity generation.
Table 3.2: Inventory of Coal by Type as on April 1, 2007 & 2008
Types of coal
Prime coking
01/04/2007
01/04/2008
Reserve (Million Tonnes)

Proved
Indicated Inferred
4,614
699
0
4,614
699
0
Medium coking
01/04/2007
01/04/2008
11,853
12,308
11,601
12,136
1,880
1,880
25,334
26,324
Blendable / Semi coking
01/04/2007
01/04/2008
482
482
1,003
1,003
222
222
1,707
1,707
Non coking
01/04/2007
01/04/2008
81,624
84,425
1,07,362
1,10,378
36,042
36,388
2,25,027
2,31,191
01/04/2007
01/04/2008
98,573
1,01,829
1,20,665
1,24,216
38,144
38,490
2,57,382
2,64,535
(including high sulphur)

Total
As on
Total
5,313
5,313
Source: Coal Directory of India (2007-08), Coal Controllers Organization, Kolkata, p. II.5
Table 3.3 showing state wise reserve of Indian coal in the next page exhibits that
Jharkhand occupies the highest amount of coal reserve, Orissa occupies the second
highest reserve and Chhattisgarh has the third highest figure of coal reserve whereas West
Bengal has the fourth position as regard to the coal reserve. Further, Jharkhand is the only
state that occupies coking coal, which is mostly operated by BCCL and ECL.
54
Table 3.3: Geological Resources of Indian Coal by State and Depth as on April 1, 2008.
State
West Bengal
Type of coal
Depth
Reserve (Million Tonnes)

Proved Indicated
210.00
18.50
Inferred
0.00
Total
228.50
Medium Coking
0-1200
Semi Coking
0-1200
188.05
432.49
168.23
788.77
Non Coking
0-1200
11186.04
11229.06
4902.47
27317.57
All
0-1200
11584.09
11680.05
5070.70
28334.84
Prime Coking
0-1200
4614.35
698.71
0.00
5313.06
Medium Coking
0-1200
11743.02
10557.60
1607.40
23908.02
Semi Coking
0-1200
223.34
471.55
53.45
748.34
Non Coking
0-1200
20912.21
19901.04
4677.47
45490.72
All
0-1200
37492.92
31628.90
6338.32
75460.14
0-1200
354.49
1560.11
272.83
2187.43
Non Coking
0-1200
7541.47
8322.26
2508.80
18372.53
All
0-1200
7895.96
9882.37
2781.63
20559.96
Semi Coking
0-1200
70.77
99.25
0.00
170.02
Non Coking
0-1200
10348.55
29172.90
4442.57
43964.02
All
0-1200
10419.32
29272.15
4442.57
44134.04
All Non Coking

All Non Coking
All Non Coking
All Non Coking
All Non Coking
Non Coking
High Sulphur
All
Arunachal Pradesh All High Sulphur
Meghalaya
All High Sulphur
Nagaland
All High Sulphur
Prime Coking
0-300
0-1200
0-1200
0-1200
0-300
0-1200
0-1200
0-1200
0-300
0-300
0-300
0-1200
765.98
5004.26
19221.59
9007.13
0.00
0.00
314.59
314.59
31.23
88.99
3.43
4614.35
295.82
2821.66
31728.09
6710.65
58.25
2.79
24.04
26.83
40.11
69.73
1.35
698.71
0.00
1992.17
14313.66
2978.81
42.98
0.00
34.01
34.01
18.89
300.71
15.16
0.00
1061.80
9818.09
65263.34
18696.59
101.23
2.79
372.64
375.43
90.23
459.43
19.94
5313.06
Medium Coking
0-1200
12307.51
12136.21
1880.23
26323.95
Semi Coking
0-1200
482.16
1003.29
221.68
1707.13
Non coking
0-1200
High sulphur
0-1200
Total
0-1200
Jharkhand
Madhya Pradesh Medium Coking
Chhattisgarh
Uttar Pradesh
Maharashtra
Orissa
A. Pradesh
Sikkim
Assam
India
India (Total)
83987.23 110242.52
438.24
135.23
101829.49 124215.96
36018.93 230248.68
368.77
942.24
38489.61 264535.06
Terti ary Coal fields
0-1200
438.24
135.23
368.77
942.24
Gondwana Coalfields
0-1200
101391.25
124080.73
38120.84
263592.82
GRAND TOTAL
0-1200
101829.49
124215.96
38489.61
264535.06
Source: Coal Directory of India (2007-08), Coal Controllers Organization, Kolkata, p. II.7-12
55
Table 3.4, given below, showing state-wise reserve of Lignite, exhibits that Tamilnadu
takes up the highest position dominating other states so far as reserve of Lignite is
concerned. However, Rajasthan and Gujarat occupy second and third positions
respectively. Further, we also observe that there is slight improvement in reserve of
Lignite as on April 1, 2008 and this is mainly due to improvement in reserve in Rajasthan.
Table 3.4: State-wise Reserve of Lignite as on April 1, 2007 & 2008
State
As on
Reserve (Million Tonne)

Proved
Indicated
Inferred
Total
1/4/2007
785.27
259.40
1618.08
2662.75
1/4/2008
785.27
259.40
1618.08
2662.75
1/4/2007
0.00
20.25
7.30
27.55
1/4/2008
0.00
20.25
7.30
27.55
1/4/2007
0.00
0.00
9.65
9.65
1/4/2008
0.00
0.00
9.65
9.65
1/4/2007
0.00
405.61
11.00
416.61
1/4/2008
0.00
405.61
11.00
416.61
1/4/2007
560.91
2620.60
1129.92
4311.43
1/4/2008
639.69
2568.30
1276.84
4484.83
1/4/2007
2831.00
23387.42
5108.60
31327.02
1/4/2008
3399.39
22819.03
5108.60
31327.02
1/4/2007
0.00
0.29
0.86
1.15
1/4/2008
0.00
0.29
0.86
1.15
All India
1/4/2007
4177.18
26693.57
7885.41
38756.16
All India
1/4/2008
4824.35
26072.88
8032.33
38929.56
Gujarat
J&K
Kerala
Pondicherry
Rajasthan
Tamilnadu
West Bengal
Source: Coal Directory of India (2007-08), Coal Controllers Organisation, Kolkata, p. II.5
Coal Reserve of ECL

Estimates of the total geological reserves down to a depth of 1200 metres from surface in
West Bengal and 600 metres from surface at Jharkhand as on April 1, 2010 (as per GSI)
stood at 29.723 billion tonnes in West Bengal and 16.396 billion tonnes in Jharkhand.
The total comes to 46.119 billion tonnes. Of these reserves, 15.837 billion tonnes are
proved, 23.754 billion tonnes are indicated and 6.528 billion tones are estimated. 15
56
The Raniganj coal is the best type of non-coking coal reserves in the country. It has
higher quality and low ash content (less than 20%) and is most suited to Power Utilities.
It can reduce the import of coal to meet the demand of our power plants. Coal of Barakar
generally is of inferior quality, which occurs mainly in Jharkhand State. However, it is
suitable for modern powerhouses & other small- scale industries.
3.4 Global Scenario of Coal
3.4.1 Global Reserve
Although coal resources are widely distributed around the world, countries depending on
coal for domestic energy or export revenue are mostly blessed with the concentration of
proven coal reserves. While OECD-North America and the Transition Economy countries
controlled 40 percent and 23 percent of the proved coal reserves respectively, about 19
percent of proved coal reserves are in China and 11 percent in South Asia. Thus, almost
93 percent of proved coal reserves are concentrated in these four regions. Therefore, the
outlook for coal production in these four countries will dominate the future of global coal
production. As per latest study done in 2006 by German Federal Institute for Geosciences
and Natural Resource, proved coal reserves including anthracite, bituminous, sub
bituminous and lignite, stands at 1019 BT (Billion tonnes). The Region-wise detail of
reserve is shown below in Table 3.5 and in Figures 3.2 & 3.3 and 3.4 in the next page. 16
Table 3.5: World Coal Reserve
Region
Reserve in 2006 (Mt)

Hard coal
%
Lignite
%
OECD-North America
278,617
38
128,467
45
Transition Economies
112,198
15
118,260
42
China
167,000
23
25,000
9
Asia Ex. China
105,682
14
11,131
4
L. America
19,769
3
124
0
Africa & M. East
52,846
7
202
0
Total
736,112
100
283,184
100
Source: The Coal Directory of India, 2007-2008, pp X.1
57
Total
%
407,084
0.40
230,458
0.23
192,000
0.19
116,813
0.11
19,893
0.02
53,048
0.05
1019,296 100.00
Graphical presentation of World Coal Reserve

Figure 3.2: Pie Chart showing Reserves of Hard Coal in 2006 (in %)
3%
7%
14%
38%
23%
OECD
Tr. Economies
China
Asia Ex. China
L. America
Africa & M. East
15%
Figure 3.3: Pie Chart showing Reserves of Lignite Coal in 2006 (in %)
0%
9%
4%
0%
OECD
Tr. Economies
45%
China
Asia Ex. China
L.America
Africa & M.East
42%
Figure 3.4: Pie Chart showing Total Coal Reserve in 2006 (in %)
L. America
Africa & M. East
2%
5%
Asia Ex. China
11%
OECD-North
America
40%
China
19%
Transition
Economies
23%
58
Figure 3.2 given in the previous page exhibits that OECD-North America occupies the
highest global reserve of hard coal containing 38 % of the reserve. China holds the second
position occupying 23 % of the global hard coal reserve, Transition Economy countries
occupy the third place containing 15 % of the reserve and Asia excluding China occupies
the fourth position holding 14 % of the global hard coal reserve and so on.
Figure 3.3 given in the previous page displays that almost all the reserves of Lignite are
concentrated in the four regions. OECD-North America again occupies the highest global
reserve of lignite containing 45 % of the reserve. Transition Economy countries hold the
second position occupying 42 % of the global lignite reserve, China occupies the third
place holding 15 % of the reserve and Asia excluding China occupies the fourth position
holding 14 % of the global lignite reserve and so on.
Figure 3.4 given in the previous page exhibits that while OECD-North America and the
Transition Economy countries controlled 40 percent and 23 percent of the proved coal
reserves respectively, about 19 percent of the proved coal reserves are in China and 11
percent in South Asia. Thus, almost 93 percent of proved coal reserves are concentrated
in these four regions whereas other countries occupy only 7 % of the total global coal
reserve. Therefore, we understand that the outlook for coal production in the stated four
regions will dominate the future of global coal production.
Global Coal Reserves as of 2010: More recent study by World Coal Association reveals
that there are over 847 billion tonnes of proven coal reserves worldwide. The study
estimates that the USA has the largest share of the global resource (25.4%) followed by
Russia (15.9%), and China (11.6%). India is the fourth in the list with 8.6 % of the global
resource. The study further indicates that there is enough coal to last us around 118 years
at current rates of production. In contrast, proven oil and gas reserves are equivalent to
around 46 years and 59 years respectively at the current production level. Further, around
62 % of oil and 64 % of gas reserves are concentrated in the Middle East and Russia . 17
3.4.2 Production and Consumption of Coal A Global Vie w.
In 2006, the production of global coal industry stood at 6142 MT, of which hard coal
stood at 5205 MT and brown coal was 937 MT. In 2010, production of hard coal rose to
6185 MT and brown coal to 1042 MT (Source: World Coal Association). The top four
59
coal producing countries are China, USA, Australia and India.
18
Until 2006, the global
coal market saw some sort of equilibrium between demand and supply of coal because
China used to export coal. From the year 2007 onwards, Chinas own rising demand for
coal for its power plants saw the country enter into the global market as a buyer
aggressively. According to the International Energy Association (IEA), China has become
bigger consumer of electricity than the USA in the year 2009. China occupies the first
place in both production and consumption. Further, now instead of exporting, it is
importing coal. Consequently, it has become now one of the biggest importers of coal after
Japan. In India, too the rapid demand for coal is seeing an increasing dependence on
imports. We observe from the Tables that India occupies third position in both production
and consumption. This fact confirms a huge demand of coal that cannot be met from
indigenous production. The global position of different countries as of 2010 with regard to
coal production and consumption is exhibited in the Tables 3.6 and 3.7. 19
Table 3.6 displays the names of the top five countries with regard to production and
consumption of hard coal as of 2010 whereas Table 3.7 displays the names of the top five
countries with regard to production of brown coal. We find Germany occupies the highest
position in producing brown coal; Indonesia occupies the second position whereas
Australia has the fifth position in producing brown coal and so on.
Table 3.6 Production and Consumption of Hard Coal of Top Five Countries as of
2010 (in MT)
Producti on (Hard Coal)
Consumption
Country
Quantity
Position
Country
Quantity
Position
China
3162
First
China
3421
First
USA
932
Second
USA
1085
Second
India
538
Third
India
628
Third
Australia
353
Fourth
Russia
342
Fourth
South Africa
255
Fifth
Japan
187
Fifth
Source: Business World, RNINO. 39847/ 81, 5 September 2011, p. 29
Table 3.7: Production of Brown Coal of Top Five Countries as of 2010 (in Mt)
Country
Germany
Indonesia
Russia
Turkey
Australia
Quantity
169
163
76
69
67
Position
First
Second
Third
Fourth
Fifth
Source: http://www.worldcoal.org/resources/coal-statistics / Retrieved on 25-5-12
60

3.5 Conclusion
This part of the study provides information on historical background and development of
coal industry in India and formation of Coal India Limited. We come to know how
different subsidiaries of CIL were formed for streamlining and enhancing production of
coal to meet growing energy need of our country. We have also highlighted here Indian
and Global coal reserves and the position of our country in international perspective as far
as coal deposits are concerned. We understand Coal consumption mainly takes place in
the country of origin. On an average, only 15 % of production is exported and 85 % of
produced coal is consumed domestically. Moreover, China and the USA mostly dominate
coal production of the world. China has even totally stopped exporting coal and started
importing whereas the USA exports very little at present. This implies increasing
emphasis on the conservation of domestic coal reserves to meet future energy demand in
the wake of uncertain international energy environment. India should also follow this line
of thinking for the safety and prosperity of our future generations.
61
References:
1. Glimpses of Coal India (2006), CIL, Kolkata, p.1.
2. Internal Official Documents and collected Information.
3. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers
Organisation, Kolkata, p. I.5.
4. Ibid.
5. Glimpses of Coal India (2006), CIL, Kolkata, p.3
Organisation, Kolkata, p. I.6.
7. Annual Report & Accounts (2010-11), CIL, pp. 101-103 and articles.economictimes.
indiatimes.com > collections > Coal India, Retrieved on 25-05-12.
8. http:// www.coalindia.in.
9. Annual Report & Accounts (2010-11), Coal India Limited, p. 37 & 29.
Organisation, Kolkata, pp. II. 1-2.
11. Ibid.
12. Glimpses of coal India (2006), CIL, Kolkata, p. 14.
13.
Glimpses of coal India (2006), CIL, Kolkata, p. 14 and

http://www.worldcoal.org/coal/where- is-coal- found, Retrieved on 25-5-12.
Organisation, Kolkata, pp. II. 1-2.
15. http:// www.easterncoal.gov.in
Organisation, Kolkata, p. X.1.
17. http://www.worldcoal.org/resources/coal-statistics / and http://icmlindia. com/globalcoal-scenario , Retrieved on 25-5-12 at 10.50 am.
18. http://icmlindia.com/global-coal-scenario, Retrieved on 25-5-12 at10.10 am.
19. Business World, RNI NO. 39847/81, 5 September 2011, pp. 29-38.
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