Over View of Indias Coal Sector

COAL AND LIGNITE RESERVES IN INDIA

 Responsibility of determining policies and strate gies in respect of exploration and development of coal and lignite reserves, sanctioning of important projects of high value and for deciding all related issues. The Public Sector Undertakings, namely, Coal India Ltd. and its subsidiaries and Neyveli Lignite corporation Limited are under the Administrative control of the Ministry, of coal The ministry of coal also has a joint venture with Government of Andhra Pradesh called Singareni Collieries Company Limited. Government of Andhra Pradesh holds 51% equity and Government of India holds 49 % equity.

Ministry of Coal

Trends in Indias Primary Energy Supply

The primary energy supply has increased from about 117 Mtoe in 1960-61 to 604 Mtoe in 200809 Correspondingly commercial energy supply has increased from about 43 Mtoe to 445 Mtoe during this period As per the Integrated Energy Policy Committee Report the projected primary energy supply requirement in 2031-32 ranges from 1660 to 2100Mtoe Of the projected demand share of coal is in the range of 51-62%

Primary Energy Supply India - 2008-09

Primary Commercial Energy - 445.45 Mtoe Coal 55% Oil 33% Gas 9% Nuclear 1% Hydro 2% Primary Non-commercial Energy -158.98 Mtoe Total Primary Energy Supply- 604.43 Mtoe

Per Capita Energy Consumption

Indias per capita energy consumption at 530 Kgoe is one of the lowest compared to world average of 1820 Kgoe Similarly, per capita power consumption at 543 Kwh is one of the lowest compared to world average of 2752 kwh

Challenges in Energy Supply

Nearly 600 million population do not have access to electricity About 700 million use biomass as their primary energy resource for cooking About 30% population is below poverty line Ensuring life line supply of clean energy is essential To overcome poverty, Indias GDP needs to grow at over 9% for which energy is the critical input

Challenges in Energy Supply (contd.)

Indias energy supply comes from different sources, coal, hydro power, oil & gas, nuclear and various forms of non conventional energy Broadly Oil & gas resources are concentrated in western region; coal in eastern region; hydro resources in north & north eastern regions and lignite in southern region Our energy strategy aims at utilising all available domestic energy resources to the optimal output in a competitive manner to ensure that total energy requirements are met in a least cost manner

Reliance on Coal
About 55% of primary commercial energy and 70% of power generation are coal based The trend is likely to continue even beyond 2031-32 This is basically due to abundantly available domestic coal resources and competitive price which provide security Production augmentation includes taking up new projects by National coal companies and development of captive mines through which number of players have been increased In addition, coal supplies are being secured through acquiring coal properties abroad

Policy changes since Nationalisation

Coal industry was Nationalised in early 1970s Coal Production increased from about 78 Mt at the time of Nationalisation to 540 Mt in 2011-2012 Coal Mines Nationalisation Act 1973 was amended permitting private sector in coal mining limited to captive purposes 208? blocks with around 50 bt reserves have been allotted to both public and private companies Presently allocation of coal & lignite blocks is through competitive bidding Group captive mining encouraged 100% FDI permitted in captive mining 10

Policy changes since Nationalisation

Coal was put on open general license & Import duty on coal tapered off Coal price and distribution de controlled New Coal distribution policy adopted & 10% of coal being offered through Eauction Fuel supply agreements made mandatory Project Approval procedures streamlined Performing coal companies extended enhanced delegation of powers with more autonomy (maharatna/navratna/miniratna status)
11

Policy changes since Nationalisation

Exploration activities enhanced Private block holders permitted to take up exploration as per MoCs guidelines Emphasis laid on promotion of clean coal technologies Policy for CBM put in place Emphasis laid on coal washing, UCG, Surface coal gasification, CTL etc. Guidelines for UCG published
12

Policy changes since Nationalisation

Guidelines for mine closure issued Stringent environmental laws to be complied with by coal industry National R&R policy put in place and emphasis laid on equity and inclusive growth Acquisition of coal properties abroad permitted from energy security point of view Outsourcing of operations being encouraged from economic and efficiency enhancement points of view
13

Policy changes since Nationalisation

State of the art technologies being promoted Regulatory mechanism for coal under process Large scale imports encouraged in view of emerging gap between demand & domestic availability Infrastructure for coal imports and movement being strengthened 10% of Coal Indias and 6.4% of NLCs stakes disinvested
14

Policy changes since Nationalisation

E-procurement of goods & services being adopted & ERP systems being implemented Safety & Health of miners is of paramount importance Risk assessment & management being adopted for self regulation from safety angle Internal safety organizations strengthened A major project to address the issue of Mine Fires, Subsidence & Rehabilitation in Jharia & Raniganj Coalfields taken up
15

Captive Mining Legal Frame work

Under Coal Mines (Nationalisation) Act 1973, Coal Mining is exclusively reserved for Public Sector.

An amendment to the Act in 1976? - permitted captive mining by private companies for production of iron & steel.
Amendment to the Act in 1993 - allowed captive mining for generation of power, washing of coal & other end uses to be notified by Government from time to time. Mining of coal for captive use for production of cement permitted in 1996.

Production of syn-gas obtained through coal gasification (underground and surface) and coal liquification - notified as end use for coal mining in July 2007.
05.06.2012 16

Geological Resources of Coal as on 01-04-2012 (in Billion Tonnes)

Type of Coal Prime Coking NonCoking Total % Proved Indicated Inferred Total

17.93
100.21 118.14 40.25%

13.65
128.52 142.17 48.44%

2.01
31.17 33.18 11.31%

33.69
(11.5%) 259.80

(88.5%) 293.49
100%

Plan-wise Coal Production

Five Year Plan Period First Plan Second Plan Third Plan Fourth Plan Fifth Plan Sixth Plan Seventh Plan Eighth Plan Ninth Plan Tenth plan Eleventh plan Terminal Year Coal Production (million tonnes) %CAGR*

1955-56 1960-61 1965-66 1973-74

38.30 55.67 67.80 78.20 7.76 4.02 1.79

1978-79
1984-85 1989-90 1996-97 2001-02

102.02
147.41 200.89 289.32 327.79

5.46
7.86 6.38 5.34 2.52

2006-07
2011-12

430.83
539.94

5.62
4.62

* Note: The % CAGR over the last 55 years i.e. 1955-56 to 2011-12 works out to 4.93%

Trend in Demand/off-take of coal

Five Year Plan Period (Terminal year) Sector
IX Plan (2001-02) X Plan (2006-07) XI Plan (2011-12) RE XII Plan (2016-17) Projn.

(million tonnes)

XIII Plan (2021-22) Projn.

IEP (2031-32) Projn.

Steel Power (U) Power (C)

28.48 248.80 17.02 15.25 42.16 351.71

35.17 307.92 28.13 19.74 72.91 463.87

43.20 415.00 42.94 28.00 120.73 649.87

67.20 682.08 56.36 47.31 127.55 980.50 8.57

105.00 938.00* 79.00 78.00 173.00 1373.00 6.96 2343 1659

Cement
Others Coal Offtake/ Demand %CAGR

3.51

5.69

6.97

5.48

Coal Production Programme for XII Plan

(million tonnes)
Company 2012-13
BE CIL SCCL Captive Others Total 464.10 53.10 39.20 18.00 574.40

2013-14
Proj. 485.65 54.30 46.80 18.25 605.00

2014-15
Proj. 507.75 55.00 53.25 19.00 635.00

2015-16
Proj. 530.30 56.00 66.20 20.50 673.00

2016-17
Proj. BAU 556.40 57.00 79.60 22.00 715.00

2016-17
Proj. OPT 615.00 57.00 100.00 23.00 795.00

Coal Characterisitcs
AIR DRIED PARAMETER MOISTURE (%) ASH (%) VOLATILE MATTER (%) RANIGANJ 0.60-11.20 8.80-47.00 11.50-39.20 JHARIA 0.60-2.70 9.80-34.00 10.20-31.40 FIELD TALCHER 2.90-9.60 6.80-48.40 22.70-38.60 RAJMAHAL 4.50-12.40 10.00-45.00 21.90-34.40

GCV (Cal/g)
NITROGEN % SULPHUR (%) SiO2 (%) Al2O3 (%) Fe2O3 (%)

4050-7190
0.90-2.10 0.20-1.10 47.80-70.00 21.40-28.60 3.20-10.90

5205-7640
1.10-2.10 0.30-1.10 41.62-46.20 18.40-25.77 8.54-10.22

3170-6750
0.90-1.70 0.30-0.90 55.37-68.29 20.15-30.76 3.22-13.60

3440-5670
0.70-1.40 0.20-0.80 54.80-63.60 26.10-27.20 2.20-10.60

NEED FOR WASHING

The most common and undesirable matter in coal is the noncombustible inorganic material which does not burn with coal and is termed as ash. The percentage of ash in coal may get as high as 55% or even higher. Some extraneous material (inseam bands /partings) also gets mixed with coal during its mining, subsequent handling and transport. All industries viz. power, steel, sponge iron, cement etc. that use coal, specify a range of quality requirements for their intended purpose

Coal beneficiation or washing is a process (with or without use of water) of mechanical separation of impurities (ash) from coal, making it suitable for particular use.

WASHERIES IN CIL
Coking Coal
Company/ No. of washeries Capacity Washed coking coal production (Mt) Despatch 2011-12 (Target)

CIL ( 12) 22.18 SAIL & TISCO (5) 7.70 TOTAL 29.88

3.89 3.14 7.03

Non Coking Coal

6.54

Raw Coking Coal feed for 7.03 Mty target is 15.5 Mt (approx.)

Company/ No. of washeries

Capacity

Washed Non-coking coal production (Mt) 2011-12 (Target)

Despatch

CIL ( 5) OTHERS TOTAL

17.22 78.74 95.96

11.30 25.00 36.30

13.92

Raw Non-Coking Coal feed for 36.30 Mty target is 52 Mt (approx.)

Production of Washed Coal in 2011-12

(in 000 tonnes)
Type of Coal Company CIL SAIL Coking Coal Private Total CIL Non-Coking Coal Private Total 6617.4 13826.6 12842 2846.8 6073.5 11443 43.02 43.93 89.11 Raw Coal Feed 6575 634.2 Washed Coal 2892 334.7 Yield (%) 43.98 52.78

30766.1
43608.1

21165.2
32608.2

68.79
74.78

Non-coking coal private washery figure is not exhaustive , the data consists of only reported figures.

Despatch of Washed Coal in last 3 Years

(Million Tonnes) Washed Coal (Non-Coking)

Year

Washed Coal (Coking)

Middlings (Coking)

Middlings (Non-Coking)

2009-10

6.518

13.981

4.711

3.726

2010-11

6.854

14.537

4.504

3.790

2011-12

6.544

13.921

5.545

3.545

All the figures of Washed coal & Middlings relate to coal companies (Private & Public). Private washeries are not included here.

ISSUES CONCERNING COKING COAL WASHING

Lower Operating Efficiency of Old Coal Washeries Problems in Beneficiation of Fines Recovery of blocked Coking Coal Reserves Washing of Non Linked Washery Coking Coal Revised Grading of Coking Coal
ISSUES CONCERNING WASHING OF NON COKING COAL

Transport of high ash coal Ensure minimum loss of carbon or heat value in rejects. Utilizing the rejects Possibility of deep washing Grading system for Non-coking coals of GCV up to 1300 K cal/kg

COAL AVAILABLE FROM CIL FOR POWER UTILITY SECTOR IN XII PLAN
Particulars Coal Available for supply to Power Utilities PUs Requirement for Power Utility Sector as per Government directive %age Materialization 2012-13 337.69 365.74 2013-14 358.88 417.15 2014-15 397.67 453.95 2015-16 437.05 478.45 2016-17 473.50 478.45

92.34

86.02

87.60

91.35

98.97

LIGNITE RESERVES IN INDIA

28

4907 2722 Lignite Reserves in Million Tonnes as on 01.04.2012

T.N & Pondy Rajasthan Gujarat 34295 (81%) 4907 (12%) 2722 (7%) 28 10 1 41963 (100%)

10

34295

J&K Kerala West Bengal

Total

NLC A PROFILE
NLC established in 1956, is a Schedule-A, Navratna having more than 17500 employees. PSU At present operates three opencast lignite mines at Neyveli (28.5 MT ) and one mine at Barsingsar, Rajasthan ( 2.1 MT). Meets the fuel needs of three Thermal Power Plants (2490 MW) & an independent power producer M/s.STCMS at Neyveli and one Thermal Power Plant at Barsingsar (250 MW). Power generating capacity has raised to 2740 MW.

NLC A PROFILE

(contd.)

NLC is the largest opencast lignite mining company and the largest power producer using lignite as fuel in India. NLC is a financially sound company with the following ratings :CRISIL ICRA AAA (stable) LAAA

All the three mines and power plants at Neyveli are ISO certified for quality management system, environmental management system and occupational health and safety management system. NLC allocates not less than 1% of profit after tax per year as financial commitment towards CSR activities.

Corporate Governance:- NLC adheres to highest standards of Corporate Governance in transparency, accountability and integrity.

OPERATING UNITS OF THE COMPANY

FOUR LIGNITE MINES

30.6 Million Tonnes / Annum FOUR THERMAL POWER STATIONS 2740 Mega Watt

31

NLCs OPERATION IN THE COUNTRY

Neyveli Mines (28.5) MTPA & Power (2490MW)

Barsingsar Mines (2.1 ) MTPA & Power (250MW

32

MINE-I LINKED TO TPS-I & TPS-I EXPN

Mine-I: Capacity- 10.5 Million Tonnes per annum Commenced in May 1962 Continuous mining technology with Bucket Wheel Excavators Conveyors and Spreaders. TPS-I: Capacity - 600 MW. (6 X 50 & 3 X 100) First unit commissioned in May 1962 and Last Unit in September 1970. Life Extension Programme (LEP) taken up between April 1992 and March 1999, thus the life of the Units extended for another 15 years. TPS-I Expn: Capacity - 420 MW First unit synchronised in October 2002 and second unit in July 2003 33

MINE-II LINKED TO TPS-II & TPS-II EXPN

Mine-II: Capacity- 15.0 Million Tonnes per annum Commenced in March 1985 10.5 Million Tonnes of Lignite per annum increased to 15.0 Million Tonnes in March 2010 Continuous mining technology with Bucket Wheel Excavators Conveyors and Spreaders. TPS-II: Capacity - 1470 MW. (7 X 210)

First unit commissioned in March 1986 and Last Unit in June 1993. I stage - 3 units of 210 MW
II stage - 4 units of 210 MW TPS-II Expn: Capacity - 500 MW (2 X 250) Unit-I Synchronised on 18.05.2011 Unit-II Under construction.

34

MINE-IA FOR IPP & LIGNITE SALES

Mine-IA: Capacity- 3.0 Million Tonnes per annum meets the fuel requirement of M/S. ST-CMS an IPP, Commenced in March 2003. Raw lignite requirements of other industries. Continuous mining technology with Bucket Wheel Excavators Conveyors and Spreaders.

35

BARSINGSAR MINE LINKED TO BARSINGSAR TPS

Barsingsar Mine: Capacity- 2.1 Million Tonnes per annum Barsingsar TPS: Capacity- 250 MW (2 X 125) First Unit Commissioned in January 2012 Mine attained rated capacity Second unit Commissioned in December 2011 on 31st January 2010 Mining operations outsourced Using conventional mining equipments

36

XII Five year Plan NLCs Investment Plans

During the XII Five Year Plan ( 2012-17) NLC Plans invest Rs 31191.51 crore to add capacity of 6 MTPA of Lignite mining capacity and 2885 MW of Power generation capacity

XII Five year Plan NLCs Investment Plans (Cont.)

Plan Outlay

Rs in Millions
Lignite Sector Power sector Total 25107.00 267284.00 292391.00
Funding Rs Millions

Capacity addition in Lignite Sector ( MT)

XI Plan Terminal Year (2011-12) Addition in XII Plan (2012-17) XII Plan Terminal Year (2016-17)

Lignite (MTPA) Mine I Mine IA Mine II Barsingsar Hadla Mines Palana Mine Devangudi Mine Total (MTPA)

10.50 3.00 15.00 2.10

(2.50) 4.00 1.90 0.60 2.00

8.00 7.00 15.00 2.10 1.90 0.60 2.00

30.60

6.00

36.60

Capacity additions in Power sector in MW

XI Plan Terminal Year (201112) Addition in XII Plan (2012-17) XII Plan Terminal Year (2016-17)

Power (MW)
TPS I TPS I Expansion TPS II TPS II Expansion Barsingsar TPS Barsingsar Expn NNTPS NTPL (Coal) UP TPS (Coal) Solar Power Wind Energy Total (MW) 600 420 1470 250 500 250 1000 1000 660 25 50 2885
600

420 1470 500 250 250 500 1000 660 25 50 5725

2740

Neyveli Lignite Analysis

Proximate
Parameter Moisture Ash Volatile matter Fixed carbon Gcv Net.Gcv BD Unit in % in % in % in % cal/gm Min 46 2 24 18 Max 56 12 26 24 Parameter Moisture Ash

Ultimate
Unit in % in % Min 46 2 Max 56 12

Carbon
Hydrogen Nitrogen Sulphur Oxygen

in %
in % in % in % in %

27
2.2 0.2 0.5 12

31
2.5 0.4 1 14

2600 2900

Kcal/kg 2200 2500 gm/cc 1.01 1.2

Lignite Ash Characteristics

Chemical Analysis of Lignite Ash (in %)
Parameter SiO2 Min 5 Max 40

Fusion Charecteristics of Lignite Ash

Range (in Deg. C)
Intial deformation Temperature Hemi Spherical Temperature Flow Temperature 1250 1280 1300 1400 >1400 >1400

Al2O3
Fe2O3 CaO MgO Na2 O K2 O SO3

10
2 10 2 0.5 0.02 5

40
16 30 10 2.5 0.14 40

Parameter Hardgrove Grindability Index Incubation period (in weeks)

Range

105 6

140 8

NLCs collaboration with Japan

Study on upgradation of NLCs lignite with M/s. Kobe Steel of Japan. Study on upgradation of Brown coal using waste heat from flue gas with M/s. UBE Industries, Japan. Benefits of UBC:

Calorific value of the UBC product increases. Prevention of spontaneous combustion. Long distance transportable. Reduction in auxiliary energy consumption in boilers. Reduction of CO2 emission.

Upgradation of Brown Coal process of Neyveli Lignite M/S KSL, Japan

UBC process involves removal of moisture from lignite to upgrade it into a higher calorific value product . The plant consists of a crushing mill, slurry making, slurry de watering, oil recovery, briquetting and product yard. METI (Ministry of Economic Trade and Industry, Japan) NEDO(New Energy and Industrial Development Organization) funded the project from June 2012 to March 2013. NLC provided 80.3 tonnes of lignite to KSL pilot plant, Indonesia for testing purpose. The pilot plant was visited by NLC officials during sep-2012. Non Disclosure Agreement made between NLC & KSL UBC product produced in the pilot plant from NLCs lignite is to be tested for firing in boiler at Japan By KSL.

45

Upgradation of Brown Coal using waste heat from flue gas

R&D work on up gradation of brown coal by Mizuho Information & Research Institute along with M/s. UBE Industries Ltd. NLC and M/s UBE Industries Ltd are under taking preliminary discussions for collaboration in this research project. Process: Lignite crushing, removal of sulphur from flue gas, drying of lignite using flue gas (waste heat) from Power Plant.

Characteristics of NLC Lignite and UBC Powder

Properties Proximate Analysis 1 Moisture

Raw Lignite

UBC Powder

53.36 9.93
20.10 16.60 2280

0.00 18.50
43.20 38.30 5350

2 Ash
3 Volatile Matter 4 Fixed Carbon Gross Calorific Value 5 (cal/g)

Characteristics of NLC Lignite and UBC Powder

Properties Ultimate Analysis Raw Lignite UBC Powder
0.00

1 Moisture 2 Ash
3 Carbon 4 Hydrogen 5 Nitrogen

53.36

9.93
24.14 1.88 0.29

18.50
55.84 4.31 0.61

6 Sulphur
7 Oxygen

1.34
9.05

2.69
22.15

Characteristics of NLC Lignite and UBC Powder

Properties Raw Lignite UBC Powder

Chemical Analysis of Lignite Ash

1 SiO2

57.30

51.70

2
3 4 5

Al2O3
Fe2O3 CaO MgO

22.30
9.20 3.20 0.90

24.70
10.60 3.70 1.10

6
7 8 9 10

Na2O
K2O SO3 TiO2 Others

0.10
0.10 3.90 2.20 0.80

0.20
0.10 4.80 2.30 0.80

Other Thrust Areas

Surface coal gasification technology. Underground Coal Gasification (UCG). Project for CO2 separation, including IGCC and CCS. Oxygen combustion technology demonstration.

Carbon capture and storage.

Coal washing technology. High efficient lignite drying. Enhanced Coal Bed Methane recovery. Mining of deep seated lignite.