COAL INDIA CASE STUDY

By:

Team Learn2Do

Problems Faced

Land Acquisition

Environmental Clearance

Availability of coal in few states

Bottlenecks in logistics infrastructure- Roads and Ports

Naxalism in East and East-Central parts

Inflexibility of Railways in accommodating variable rakes

Piled up coal stock

Supply

(in Million Tonnes)XI plan (2011-12) Projected

XI Plan reality

CIL 520.5 450

SCCL 40.8 40.8

Others 118.7 50

Total 680 540.8

Demand

 

XI Plan 2011-2012

Need to be Met by CIL

Power utilities 483 100% 483Power Captive 57.06 75% 42.8Cement 31.9 75% 23.92

Sponge iron & others 90.64 75% 67.98Total non Coking 662.6 617.7Coking Steel 68.5 75% 51.37Total 731.1  669.07Supply 680  540.8Shortage 51.1  128.27

Demand-Supply GapAmount to be imported

SOLUTIONS

CONTAINERIZATION

• Utilize flat bed Collapsible containers for coal transport on railways

• It can be directly transported on a truck for further transportation from railway yard for door step delivery

• Collapsible containers can save cost while returning empty containers

• Lead time to empty coal from train gets reduced

Rail TransportCOLTainer: Collapsible container

• Hybrid Model• 40 feet – Carrying capacity

27 tons• 2 stacked upon one another• Can be directly loaded on

trucks from rail/port• Faster turn around time

• Traditional • Coal Movement

• Carrying capacity 50-55 ton/wagon

• Same process for unloading• Need 200 wagons/day getting

only 170

PitheadsRailway Siding

Rail Cart

CHANNELIZE INLAND WATERWAYS

Inland Waterways

• India has about 14,500 km of navigable waterways• Nearly 3,600 km are navigable by larger vessels. • Just about 2,000 km are used currently.• One barge ≡15 rail wagons/60 trucks.

IWT standard Barge Rail Truck

Operating Cost/tonne /mile 1 cent 2.5 cent 5.3 cent

kms /tonne /3.8 ltr 827km 325km 95km

POWER PLANTS TO UTILIZE STOCK PILE

Production concentration

Power Plants near Coal Mines

Stockpile till July 2011 -70 Million

tonnes accounts to 16% of production

Constantly rising due to lack of

transport facilities.

Get into JV with NTPC to install new power

plants in states such as Jharkhand, Orissa and

Chhattisgarh

These 3 account for 60% of CIL

production. Lack infrastructure facility

to transport coal

CAPACITY UTILIZATION

Company

Total production 2010-2011(million

tonnes) OMSECL 30.8 1.6

BCCL 29.01 2.09CCL 47.52 3.88

NCL 66.25 13.52WCL 43.65 2.65

SECL 112.71 6.47

MCL 100.28 15.37

NEC 1.1 2.16     

CIL 431.32 4.73

Capacity Utilization

The Output per man shift(OMS) is really low for some subsidiaries of

CIL.

This indicates Poor manpower utilization or Very low production

The OMS can be improved by either increasing the mine utilization or cutting the cost by reducing the

manpower.

EXPLORE , EXPLORE

Mine Acquisition from Indonesia

• Total coal resources in Indonesia stand at 93.4 billion tonnes

• Quality:

Low 25%

Medium 60%

High 15%

Major Exporters: South Africa, Australia, Indonesia, Columbia, Mozambique

Abandoned Mines

• Extract coal from 18 abandoned underground mines with owned by three of its subsidiaries in partnership with private players.

• An approximate reserve of 1.647 billion tonnes of coal.• Underground mining would be revived in 6 abandoned

mines of Eastern Coalfields, 8 mines of Bharat Coking Coal, and 4 mines of Central Coalfields.

• No new environment clearance is needed

INTRODUCTION OF ERP

Integrated Logistics System

Final Site

Integrated Logistics System

Improve workflow and monitoring

Locating bottlenecks is simpler

Assist in analyzing, decision making and

scheduling

Networking between CIL and constituent

units across the supply chain

Simplify dissemination of information to

public, customers and make it interactive

Storage of data, analysis, and handling

of databases

Can provide dynamic data, scenario of the

demand and supply in different areas and

overall

More transparent system between

different subsidiaries

Helps tackle delays due to natural calamities or other challenges posed

by whether

Why?

Door to Door Delivery

Transportation Outsourcing

Coal India is responsible for transport from:

After this point CIL can Outsource transportation of the stock• Rope in a Private Player to take care of the transportation from the wagons to

the industry sites• Pay some percentage of the revenue generated from the order• Demand is huge and supply is frequent, hence lots of profits involved• Set terms and conditions of the deal and strict standards of management,

performance• Make the end users aware about this service and initiate the communication

between the transport provider and the end user

Pithead to the railways sidings

Loaded on to the wagons

Brand CIL more than just PSU or Maharatna

BRAND CIL

Why?• Attract best of the brains from the society• Instil a sense of pride in association• Increased Trust and Reliability• Attracting more private players to associate • Help in acquiring sizeable equity stakes in mines abroad

to have long term relationship• More people buying IPO of CIL

BRAND CIL

Segments:

• Internal Stakeholders – Employees, Management• External Stakeholders - value chain partners

(customers, suppliers),communities, govt. agencies, regulators, foreign players

BRAND CIL

BRAND CIL

How? •Print Ads in the newspaper on a special occasion

What?•Celebrating Glory of CIL/ Celebrating Occasion•Mention scale, potential, achievements, developments, about IPO•Motto of CIL

Why?•Increase awareness about CIL•Catching interest of people•More people buying IPO of CIL

BRAND CIL

How?• Sending brochures of CIL annually to

prospective customers

What?

• Talking about the new developments, deals and improvements in the processes

• Revenue generated and assets, spread and other associations

• Price offered and quality of goods and services provided

• Subtly pursuing them to associate with the company

Why?• Instil a sense of pride in association• Attracting more private players to associate

BRAND CIL

How?

• Ads/Videos endorsing good working conditions and culture in such industries

• Acquiring a motto “ worker’s safety, our responsibility”

What?

• Talking about human resource ,strength of any company

• Responsibility towards employees well being and safety being the duty of every enterprise

• CIL providing safety, employment, development to naxal /poverty stricken regions

Why?

• Improves the social image and standing of CIL• People having a more positive attitude towards the

company as a whole• Increased Trust and Reliability• Sense of pride while associating with the company