MOBILISATION OF COAL SUPPLY

SHASHI KUMAR

CHAIRMAN

COAL INDIA LIMITED

27TH JULY 2006

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MobilisationOf

Coal Supply

Assessment of Coal Requirement. Coal Vision, IEP, Working Group, Expert Committee.

Assessment of Indigenous Production Capacity (Raw Coal). CIL, SCCL, IISCO / TISCO / Captive Block allocatees.

Assessment of Capacity to extract CBM, Underground Gasification.

Assessment of Gap / Mechanism to Import

Competitive Pricing

Cost of Production

Remunerative Pricing

Notified Price for Utilities

Market Price for Others

Notified Price to approximateTo International Market Price-Quality adjustments.

Transport of Coal from Production Point to Consumption Point

Capacity ( Corridors Sea Route )

Cost of Transportation

Rationale of transporting of Inertmaterial.

FSTACoal Quality

Ash % age.

Size

Consistency.

GCV based Grading with lesser band width.

PRESENTATION COVERAGEMOBILISATION

OF COAL SUPPLY

Assessment

SOURCE SECTOR/PERIOD

06-07

2010 11-12 2015 16-17

20-21

21-22 24-25 2025

X PLAN WORKING GROUP

POWER 322 469 617

CAPTIVE POWER

28 32 37

STEEL 43 40 40

CEMENT 25 24 25

FERTILISER 4 5 5

OTHERS 51 50 56

TOTAL 473 620 780

COAL VISION 2025 & 8% GDP

POWER 322 427 553 699 804

CAPTIVE POWER

28 44 63 90 112

STEEL 4

CEMENT 43 54 69 90 123

FERTILISER 25 39 61 95 123

OTHERS 51 65 82 106 123

TOTAL 473 630 828 1079 1267

ASSESSMENT OF COAL REQUIREMENT

CONTD.

MOBILISATION OF

COAL SUPPLY

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SOURCE SECTOR/PERIOD

06-07

2010 11-12

2015 16-70

20-21

21-22

24-25

2025

INTEGRATED ENERGY POLICY

498 1015 877 1113 1541(26-27)2040

(31-32)

HYDROCARBON VISION 2025

BEST CASE 1118 1402 1483

BUSINESS AS USUAL

538 659

(EIA) ENERGY INFORMATION ADMINISTRATION, PARIS

HIGH 408 473 548 611 629

LOW 374 411 447 481 490

REFERENCE 390 439 493

(IEA) INTEGRATED ENERGY AGENCY, USA

484 623 713

P&E DIV.PLNG. COMM.

481 612 764 920 957 1417(31-32)

MOBILISATION OF

COAL SUPPLY

ASSESSMENT OF COAL REQUIREMENT

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AUGMENTATION OF EXISTING PRODUCTION CAPACITY

EFFORT BY COAL PRODUCER

MAXIMISATION OF PRODUCTION

A ENVIRONMENTAL FRIENDLY MANNER

B LEAST HUMAN DISPLACEMENT/ SUFFERING

C HIGHEST EFFICIENCY/ LOW COST OF PRODUCTION

D BENEFICIATION

INITIATIVE BY STATE AGENCIES

1 SIMPLER LAND ACQUISITION

2 NATIONAL R & R POLICY – LEGALLY ENFORCEABLE

3 SPEEDY EMP/ FORESTRY CLEARANCE/ NPV

4 MODIFICATION : CONTRACT LABOUR REGULATION & ABOLITION ACT 1971 + LABOUR LAWS.

5 SCRAPPING OF NCWAs

6 LAW & ORDER SITUATION

7 EVACUATION OF COAL

MOBILISATION OF

COAL SUPPLY

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CAPTIVE DISPENSATION BLOCK RESERVE (MT)

POWER PUBLIC 29 5486.48

PRIVATE 9 1496.47

STEEL & SPONGE IRON PUBLIC 4 372

PRIVATE 42 7699.34

CEMENT PUBLIC NIL -

PRIVATE 1 7

NON-CAPTIVE DISPENSATION

ISOLATED PATCHES NOT REQUIRING RAIL TRANSPORT

PUBLIC 2 92.18

PRIVATE NIL -

CENTRAL/STATE/CORPORATION OWNED BY CENTRAL GOVT. (GENERALLY NOT FULLY EXPLORED ONES)

11 4291.58

100 19445.05

Start of production within 3 Years (OC), 4 Years(UG) Grace of six months if forest land

PRODUCTION FROM CAPTIVE CAPTIVE BLOCKMOBILISATION OF

COAL SUPPLY

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SOURCE NO.OF BLOCKS ALLOTTED RESERVE (BCM)

AREA (SQ. KM)

COAL BED METHANE

16 820 7800

10 TO BE ALLOTED BY SEPT’06

597 5791

STATUS OF OPERATION : CIL-ONGC(JV)-OBTAINED 2 BLOCKS. JHARIA-CIL COMPLETED 8 SLIM HOLES. METERAGE DRILLED: 9000. DEWATERING IN PROGRESS.

U/G GASSIFICATION

NO. OF BLOCK CHOSEN (5 NOS.) -HINGANA BAZARGAON, KASTA, WANI MANDAR, LAPANGA (CHORDHARA), BHARATWADA.

ONE BLOCK TO SELECT FROM FIVE IDENTIFIED BLOCKS.CMPDI IDENTIFYING MORE BLOCKS.

STATUS OF OPERATION CIL JOINS HAND WITH ONGC.CONSULTANT-SKOCHINSKY INSTITUTE OF MINING,RUSSIA

STATUS OF COAL BED METHANE & U/G COAL GASSIFICATIONMOBILISATION

OF COAL SUPPLY

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Producing Unit Projected Production (Mt)

X-Plan (06-07)

XI-Plan (11-12)

XII-Plan (16-17)

XIII-Plan (21-22)

2025

CIL TOTAL(Incl. NE)

373 536 648 730 782

Non-CIL Areas Unblocked Areas

- - 5 25 57

Total CIL 373 536 653 755 839

Coal-equivalentCBM-UCG

- - 5 15 25

SCCL 37 41 45 47 47

Others : Captive TISCO/IISCO/

19 44 75 125 175

GRAND TOTAL (Domestic)

429 621 778 942 1086

ASSESSED COAL PRODUCTION CAPACITYMOBILISATION

OF COAL SUPPLY

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IMPORT OF COAL

2005-06 : 39.4 MT (IMPORT) + 15.6 MT (COASTAL MOVEMENT)

CAPACITY ENHANCEMENT : 200MT BY NEAR FUTURE AUGMENTATION OF 4 MINOR PORTS TO MAJOR PORT

MOBILISATION OF

COAL SUPPLY

YEAR COKING NON-COKING

<12% ASH >12% ASH

1991-92 5% 85% 85%

2000-01 9.72% 21.16% 32.6%

2005-06 NIL 5% 5%

YEAR IMPORT (MT)

2004-05 31.8

2005-06 39.4

2025-26 (Projected) 455.0

2031-32 (Projected) > 800

REDUCTION OF DUTY

DEVELOPMENT OF PORT CAPACITY

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FREIGHT CORRIDOR

EVACUATION OF COAL

MOBILISATION OF

COAL SUPPLY

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EVACUATION OF COAL

I. DEDICATED FREIGHT CORRIDOR – (DFC)CHITPUR TO LUDHIANA ; MOURIGRAM TO BHUSAWAL; TALCHER TO VIZAYWADA

II. ELIMINATION OF X-SUBSIDISATION

III. CONSUMPTION POINTS NEAR PRODUCTION POINT

IV. FSTA

MOBILISATION OF

COAL SUPPLY

YEAR COAL TOTAL %SHARE

1991-92 46 338 43

2000-01 224 473 47

2005-06 294 667 44

2024-25 664 1650 40

CAGR (05-25) 4.4% 4.9%

RAIL MOVEMENT OF COAL (INCLUDING IMPORT)

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COAL QUALITY / BENEFICIATION

CAPACITY ENVISAGED IN 2025 :

TOTAL : 464 MTY (UNDER CONSTRUCTION- 87 MTY+ FROM EXISTING - 81MTY(CIL

-11; PRIVATE -70 ) + ADDITIONAL -296)

INVESTMENT : RS.5920 CRORES FOR ADDITIONAL CAPACITY OF 296 MTY

INDUCEMENT :

CIL OFFERING INFRASTRUCTURE FACITILTY TO PROMOTE WASHING ON CHARHEABLE BASIS.

REMUNERATIVE PRICING: RS.100.00 /TONNE

COKING NON-COKING TOTAL

CIL 19.7 19.7 39.4

PRIVATE 11.3 69.3 80.6

TOTAL 31.0 89.0 120.00

MOBILISATION OF

COAL SUPPLY

PRESENT CAPACITY

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COMPETITIVE PRICING

BICP : MARCH 1996

COAL COMPANIES : JANUARY 2000

TARIFF COMMISSION : MAY 2006

MOBILISATION OF

COAL SUPPLY

A. UNIFORM PRICING ACROSS CIL

B. NORMATIVE COST OF PRODUCTION + 15% RETURN ON NET WORTH

C. DIFFERENTIAL PRICING(I) POWER UTILITIES + FERTILIZERS(II) CEMENT & STEEL AT REASONABLE PRICE(III) MARKET DRIVEN PRICE FOR REST.

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COMPETITIVE PRICING

SUGGESTIONS:

I) MARKET DRIVEN FOR SOME

II) REST TO APPROXIMATE INTERNATIONAL PRICING WITH QUALITY ADJUSTMENTS

MOBILISATION OF

COAL SUPPLY

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CONCLUSIONMOBILISATION

OF COAL SUPPLY

COAL SECTOR TO AUGMENT COAL PRODUCTION IN ENVIRONMENT FRIENDLY MANNER WITH LEAST HUMAN SUFFERING , APPROPRIATE BENEFICIATION AND COST REDUCTION.

GOVT. TO ENSURE FASTER LAND ACQUISITION, UNIFORM LEGALLY ENFORCEABLE R&R POLICY, SPEEDY ENVIRONMENTAL AND FORESTRY CLEARANCE AND MODIFICATION OF LABOUR LAWS.

NEED TO FACILITATE REMUNERATIVE PRICE FOR COAL PRODUCERS, SETTING UP OF COAL WASHERIES, SIGNING AND EXECUTION OF FSTA.

STATE TO ENSURE LOCATION OF CONSUMPTION CENTRES NEAR PRODUCTION POINTS.

OPTIMUM PRODUCTION BY COAL SECTOR STILL SHORT OF REQUIREMENT : DEVELOPMENT OF INFRASTUCTRE FACILITY TO FACILITATE IMPORT.

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THANK YOU