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 COMPILED NOTES
A BRIEF HISTORY OF COAL MINING
AND COAL DEPOSITS IN INDIA

COURTESY- SHODHGANGA

www.MINEPORTAL.in
 CHAPTER 1

INTRODUCTION TO COAL MINING INDUSTRY

Economic growth world over is driven by energy, whether in

the form of finite resources such as coal, oil and gas or in renewable forms
such as hydroelectric, wind, solar and bio-mass or its converted form,
electricity(power). Increased energy consumption (especially of electricity) is
inevitable with higher GDP growth. Coal was created by the fossilised remains
of plants and has high carbon content. Coal is the world's most abundant and
widely distributed fossil fuel. Coal is still the primary energy source for
several countries world-wide and provides between 25% and 28% of the
world's primary energy. Worldwide, coal is the main fuel for the generation of
electricity as the price of coal is cheap compared to other fuels. It is also the
highest polluting source of electricity. The other major uses of coal are in the
production of steel and synthetic fuels.

Singareni Collieries Company Limited (SCCL) is the only coal

mining company in south India. Bulk of coal production in India is from
government - owned mines managed by Coal India Limited (CIL) and
Singareni Collieries Company Limited (SCCL). SCCL is a public sector
mining organization is the largest producer of coal in India after coal India
Limited (CIL) with manpower of 77,000 and catering the energy needs of
southern part of India. The company is now operating 42 Underground (UG)
mines and 15 Open Cast (OC) mines.

1.1 Global Coal Mining Industry

1.1.1 Top Hard Coal producers:

Over 5845 million tonnes (Mt) of hard coal is currently produced worldwide
and 951Mt of brown coal/lignite. The largest coal producing countries are not
confined to one region - the top five hard coal producers are China, the USA,
India, Australia and South Africa. Much of global coal production is used in

1
the country in which it was produced; only around 16% of hard coal
production is destined for the international coal market.

Tablel.l Top Hard Coal producers in world

Top Ten Hard Coal Producers 2009

China 276 lMt Indonesia 246Mt

USA 1007Mt South Africa 236Mt

India 490Mt Kazakhstan 104Mt

Australia 325Mt Poland 84Mt

Russia 247Mt Colombia 79Mt

Source: International Energy Agency 2009

1.1.2 Coal in Electricity Generation

Coal is the major fuel used for generating electricity worldwide - countries
[108] heavily dependent on coal for electricity.

Electricity demand grows more rapidly than for any other end-use fuel, at an
average annual rate of 2.7%. Its projected share in world final energy
consumption increases from 17% today to 20% by 2020.Coal provides for
around 22% of global primary energy needs and is generating around 41% of
worlds electricity at present shown in fig 1.1.Coal is likely to maintain its
position as the worlds largest source of electricity generation through to 2020.
China and India, with ample coal reserves and rising electricity demand, will
contribute more than two-thirds to the increase in world demand over the
projection period.

2
Tablel.2 worldwide - countries heavily dependent on coal for electricity

South Africa 94% Israel 71% Morocco 57%

Poland 93% Kazakhstan 70% Greece 55%

China 81% India 68% USA 49%

Australia 76% Czech Rep 62% Germany 49%

Coal & Electricity

Coal
41%
Other*
2%

Hydro
16%

Oil
6%

Nuclear
15%

Gas
20%

Figl.l Total World Electricity Generation by Fuel

1.1.3 Coal Reserves worldwide

Coal reserves are available in almost every country worldwide, with
recoverable reserves in around 70 countries. At current production levels,
proven coal reserves are estimated to last 122 years. In contrast, proven oil and
gas reserves are equivalent to around 42 and 60 years at current production
levels respectively. Over 67% of oil and 66% of gas reserves are concentrated
in the Middle East and Russia.

3
1.1.4 World Coal Consumption by Region (1990-2030)

Percentage of coal consumption by the different countries in the world is

shown in figl .2.

Figl.2 World Coal Consumption by Region

1.2 Coal mining industry - Indian scenario

Coal is the most important and abundant fossil fuel in
India. It accounts for 55% of the country's energy need. The country's
industrial heritage was built upon indigenous coal. Commercial primary
energy consumption in India has grown by about 700% in the last four
decades. The current per capita commercial primary energy consumption in
India is about 350 kgoe/year is well below that of developed countries. Driven
by the rising population, expanding economy and a quest for improved quality
of life, energy usage in India is expected to raise around 450 kgoe/year in
2010. Considering the limited reserve potentiality of petroleum & natural gas,
eco-conservation restriction on hydel project and geo-political perception of
nuclear power, coal will continue to occupy centre-stage of Indias energy
scenario.

4
 With hard coal reserves around 246 billion tonnes, of which 92 billion
tonnes are proven, Indian coal offers a unique ecofriendly fuel source to
domestic energy market for the next century and beyond. Hard coal deposit
spread over 27 major coalfields, are mainly confined to eastern and south
central parts of the the country. About 88% of the total coal production in the
country is produced by various subsidiaries (a total of 390 mines) of Coal
India Ltd. which is the largest supplier of coal (and one of the largest
taxpayers) in the country The only other major producer outside of CIL,is the
Singerani Collieries Company that is located in Andhra Pradesh. Singerani has
37 underground and 19 opencast mines, and produced 50.4 million tonnes of
coal in 2009 -10.

1.2.1 The state-wise distribution of coal resources

As a result of exploration carried out up to the depth of 1200m by the GSI,
CMPDI and MECL etc, a cumulative total of 267.21 Billion tonnes of
Geological Resources of Coal 11061 have so far been estimated in the country.

The state-wise distribution of coal resources and its categorisation are as

follows:
Tablel.3 The state-wise distribution of coal resources and its
categorisation
Geological Resources of Coal
State (in Million Tonnes)
Proved Indicated Inferred Total
Andhra Pradesh 9194 6748 2985 18927
Arunachal
Pradesh 31 40 19 90
Assam 348 36 3 387
Bihar 0 0 160 160
Chhattisgarh 10910 29192 4381 44483
Jharkhand 39480 30894 6338 76712
Madhya Pradesh 8041 10295 2645 20981
Maharashtra 5255 2907 1992 10154
Meghalaya 89 17 471 577

5
 Nagaland 9 0 13 22
Orissa 19944 31484 13799 65227
Sikkim 0 58 43 101
Uttar Pradesh 866 196 0 1062
West Bengal 11653 11603 5071 28327
Total 1E+05 123470 37920 267210

1.2.2 Status of Coal Resources in India during Last Five Years:

As a result of Regional, Promotional and Detailed Exploration by GSI,
CMPDI and SCCL etc, the estimation of coal resources of India has reached to
267.21 Bt. the estimates of coal resources in the country during last 5 years are
given below:
Table 1.4 Coal resources in the country during last 5 years
Year Geological Resources of Coal(in Million Tonnes)
Proved Indicated Inferred Total
2005 92960 117090 37797 247847
2006 95866 119769 37666 253301
2007 97920 118992 38260 255172
2008 99060 120177 38144 257381
2009 101829 124216 38490 264535
1.4.2010 105820 123470 37920 267210

1.2.3 Indian Coal Occurrences

Coal resources of the country are mainly reported from two different
stratigraphic levels (geological period) and basinal set-up - Permian sediments
deposited in intra-cratonic Gondwana basins and Early Tertiary coal and
lignite occurrences in peri-cratonic near shore basins and shelf.
Gondwana basins of Peninsular India are generally restricted in the east-
central part of the country along some well defined linear belts namely -
Damodar-Koel, Son- Mahanadi, Satpura, and Pranhita-Godavari valleys
besides the Rajmahal basin. In addition rocks belonging to Gondwana

6
Formation are also reported beneath the Ganga and Brahmaputra alluvium in
Bengal basin and also below the Deccan Trap. Report of coal occurrences
(mostly of academic importance) is also available from Foot Hills of the
Eastern Himalaya.

Economic deposits of Tertiary coals occur in two distinct geotectonic

domains of the Northeastern India - one in the shelf sediments of Meghalaya
and Assam and the other is in the intricately thrusted belt (Schuppen Belt) of
Assam, Nagaland and Arunachal Pradesh. Lignite occurrences of economic
importance are found within the Tertiary sediments, occurring along the
pericratonic basins of the southeastern and western Peninsular Region.

Geographically coalfields of economic viability are distributed mainly in

the states of Orissa, Jharkhand, Madhya Pradesh, Chhattisgarh, West Bengal,
Maharashtra. Andhra Pradesh, Uttar Pradesh, Assam, Arunachal Pradesh,
Meghalaya , Nagaland and Sikkim.

Figl.3 Coal Fields of India

7
 STATEWISE COAL RESOURCE (. b.lb tonne)

Figl.4 State wise Coal Resources

1.3 Coal Mining at A.P (Singerani Collieries Company Limited)

The Singareni Collieries Company Limited (SCCL) is a Government coal
mining company jointly owned by the Government of Andhra Pradesh and
Government of India on a 51:49 equity basis. The Singareni coal reserves
stretch across 350 Km of the Pranahita - Godavari Valley of Andhra Pradesh
with a proven geological reserves aggregating to whopping 8791 million
tonnes. SCCL is currently operating 14 opencast and 36 underground mines
in 4 districts of Andhra Pradesh [105] with manpower around 70,000.

Table 1.5 Overview of SCCL

Mines Linder Ground - 36 : Opencast - 14
Manpower (as on 31 -07-2010) 68,451
Targetted Production(2010-11) 51.3 Million tonnes
Targetted Production(2009-10) 50.4 Million tonnes
Actual Production(2009-10) 50.42 Million tonnes
Output per manshift2009-10) 2.72 Tonnes
Major consumers Power,Cement and others

8
1.3.1 Performance of SCCL
New benchmarks in production have been created. New heights of
productivity have been scaled. New technologies are being deployed. With
innovative management practices and eco-friendly measures aimed at the
welfare of the workmen, there is a new buzz at Singareni.

Tablet.6 Overall Performance of SCCL (2005 to 2010)

2005-06 | 2006-07 2007-08 | 2008-09 j 2009-10
Coal Production 36.14 | 37.71 40.60 | 44.44
50.4
(MilLTons)
Coal despatches 44.41 '
35.32 37.48 41.79 50.42
(MilLTons)
Productivity(OMS) 2.16 2.39 2.63 3 3.35
OB 140.727 | 184.64 j
115.58 139.86 248.05
Removal(Mill.Cu.Mtr)
75,573 | 70,586 :
Manpower 86,025 82,224 69,043

Table 1.7 Production Performances

NO. OF MINIES PRODUCTION (Lakh Tonnes)

YEAR Under Open Underjground Opencast Total
Total
ground Cast Target Actual Target Actual Target Actual
2000-01 56 11 67 148.95 137.87 167.75 164.87 316.70 302.74
2001-02 55 11 66 142.45 137.47 167.55 170.64 310.00 308.11
2002-03 55 12 67 130.00 128.08 195.00 204.28 325.00 332.36
2003-04 54 12 66 149.50 133.14 185.50 205.40 335.00 338.54
2004-05 53 11 64 163.00 129.73 197.00 223.29 350.00 353.02
2005-06 47 11 58 142.51 127.11 217.49 234.27 360.00 361.38
2006-07 46 14 60 132.35 118.76 242.65 258.31 375.00 377.07
2007-08 42 17 59 131.08 126.45 273.92 279.59 405.00 406.04
2008-09 37 18 55 133.10 120.87 302.50 324.59 435.60 445.46
2009-10 37 19 56 153.60 119.69 350.40 384.56 504.00 504.25

9
1.3.2 Technology in SCCL
The SCCL had put up a pioneering effort in the introduction of
mechanization in coal mining industry in India. Continuous efforts have been
made to replace progressively the conventional technology and to introduce
modem machinery. Technology occupies the top position among the priorities
of perspective plan and it certainly holds the key to the objectives and targets
of the plan.
The coal cutting machine -Gathering arm loader-shuttle car is a system
of mechanisation along with belt conveyors for development of seams was
successfully used by SCCL from the late 40s to the early 80s. This system of
mechanisation was not adaptable for depillaring operations and therefore
found only limited application in development of flat seams.

Subsequently side dump loaders (SDL) and load-haul-dumpers (LHD) which

combine the operation of loading of coal at the face and transport by belt
conveyors became available .SCCL introduced these machines in the years
197 SDLs and LHDs need gradients flatter than about one in six for efficient
operation and in view of the limited deposits with such gradients, application
of these machines are not extended to all the underground mines 8 and 1979
respectively. LHDs are in use for mechanized depillaring operations since
1983.

1.3.3 Coal Reserves in A.P

Table 1.8 District-Wise, Grade-Wise and Depth-Wise Proved Geological

Reserves of Godavari Valley Coalfield (A.P)

Total
District Depth (m) Reserve
(m.t.)
0-300 2012.28
300-600 1437.97
ADILABAD
>600 0.03
TOTAL 3450.28

10
 0-300 1114.80

300-600 926.39
KARIMNAGAR
>600 -
TOTAL 2041.19

0-300 819.84
300-600 354.28
WARANGAL
>600 10.12
TOTAL 1184.24
0-300 2039.76

300-600 668.85
KHAMMAM
>600 -
TOTAL 2708.61
0-300 5986.70
300-600 3387.49
TOTAL
>600 10.14
TOTAL 9384.33

Fig 1.5 OB Dumping-In-pit Crusher & Conveyor Technology

1.4 Coal Mining Geology

Coal is a sedimentary rock formed from plants that flourished millions of
years ago. Coal formation began during the Carboniferous Period (known as
the first coal age), which spanned 360 million to 290 million years before
present. Coal formation continued throughout the Permian, Triassic, Jurassic,
Cretaceous, and Tertiary Periods (known collectively as the second coal age),

11
which spanned 290 million to 1.6 million years before present. Coals formed
during the first coal age are older, so they are generally located deeper in the
earth's crust. The greater heat and pressures at these depths produces higher-
grade coals such as anthracite and bituminous coals. Conversely, coals formed
during the second coal age under less intense heat and pressure is generally
located at shallower depths. Consequently, these coals tend to be lower-grade
sub bituminous and lignite coals.
We see that with the starting of the theorized coal formation periods large
portions of Asia, Europe and North America were located in the tropics area of
the globe and with Africa and South America starting out located in the
southern region of the globe and slowly over time moving up into their present
positions. Australia which has significant coal deposits, starts off in the
tropics, moves down and then back up. Therefore, theoretically during the start
of the coal formation ages the continents with the concentrations of coal
resources had been located for extended times in the tropics regions especially
during the Carboniferous Period.

I I I I I I I I I
800 700 600 500 400 300 200 100 0
Million years ago
ZoomSchoo I .coni

Figl.6 Continental Drift (Million years ago)

1.5 Methods of Coal Mining

The most economical method of coal extraction from coal seams depends on
the depth and quality of the seams, and the geology and environmental factors.
Coal mining processes are differentiated by whether they operate on the

12
surface or underground. Surface mining or Open Cast (OC) and Underground
(UG) mining are the two basic methods of mining.

1.5.1 Modern surface mining

When coal seams are near the surface, it may be economical to extract the
coal using open cut (also referred to as open cast, open pit, or strip) mining
methods [1071. Open cast coal mining recovers a greater proportion of the coal

deposit than underground methods, as more of the coal seams in the strata may
be exploited. Large Open Cast mines can cover an area of many square
kilometres and use very large pieces of equipment. This equipment can
include the following: Draglines which operate by removing the overburden,
power shovels, large trucks in which transport overburden and coal, bucket
wheel excavators, and conveyors

In this mining method, explosives are first use in order to break through the
surface of the mining area. The coal is then removed by draglines or by shovel
and truck. Once the coal seam is exposed, it is drilled, fractured and
thoroughly mined in strips. The coal is then loaded on to large trucks or
conveyors for transport to either the coal preparation plant or direct to where it
will be used.

Figl.7 Open Cast Mine

13
 mw trw> softs are rt!0ac<CHl m U*ir propf secfcuooce,
iNty are ftpped to compsetiori arid
ilwt caiRIvatod. HrtHXl asxt fartiUfiad

Figl.8 Process of extraction of coal in OC mines

1.5.1.1 Area mining

Strip mining exposes the coal by removing the overburden (the earth above the
coal seam(s)) in long cuts or strips. The spoil from the first strip is deposited in
an area outside the planned mining area. Spoil from subsequent cuts is
deposited as fill in the previous cut after coal has been removed. Usually, the
process is to drill the strip of overburden next to the previously mined strip.
The drill holes are filled with explosives and blasted. The overburden is then
removed using large earthmoving equipment such as draglines, shovel and
trucks, excavator and trucks, or bucket-wheels and conveyors. This
overburden is put into the previously mined (and now empty) strip. The
underlying coal seam will be exposed (a 'block' of coal) after all the
overburden is removed. This block of coal may be drilled and blasted (if hard)
or otherwise loaded onto trucks or conveyors for transport to the coal

14
preparation (or wash) plant. Once this strip is empty of coal, the process is
repeated with a new strip being created next to it. This method is most suitable
for areas with flat terrain.

1.5.1.2 Contour mining

The contour mining method consists of removing overburden from the seam in
a pattern following the contours along a ridge or around a hillside. This
method is most commonly used in areas with rolling to steep terrain. It was
once common to deposit the spoil on the down slope side of the bench thus
created, but this method of spoil disposal consumed much additional land and
created severe landslide and erosion problems. To alleviate these problems, a
variety of methods were devised to use freshly cut overburden to refill mined-
out areas. These haul-back or lateral movement methods generally consist of
an initial cut with the spoil deposited down slope or at some other site and
spoil from the second cut refilling the first. A ridge of undisturbed natural
material 15 to 20 feet (6.1 m) wide is often intentionally left at the outer edge
of the mined area.

1.5.1.3 Mountaintop removal mining

Mountaintop coal mining is a surface mining practice involving removal of
mountaintops to expose coal seams, and disposing of associated mining
overburden in adjacent "valley fills." Valley fills occur in steep terrain where
there are limited disposal alternatives. Mountaintop removal combines area
and contour strip mining methods. In areas with rolling or steep terrain with a
coal seam occurring near the top of a ridge or hill, the entire top is removed in
a series of parallel cuts. Overburden is deposited in nearby valleys and
hollows. This method usually leaves ridge and hill tops as flattened plateaus.

1.5.1.4 Room and pillar mining

Room and pillar mining consists of coal deposits that are mined by cutting a
network of rooms into the coal seam. Pillars of coal are left behind in order to

15
keep up the roof. The pillars can make up to forty percent of the total coal in
the seam. Though, this can be extracted at a later stage.

1.5.2 Underground mining

Figl.9 Process of extraction of coal in UG mines

Most coal seams are too deep underground for opencast mining and require
underground mining, which method currently accounts for about 60% of
world coal production. In deep mining, the room and pillar or bord and pillar
method progresses along the seam, while pillars and timber are left standing to
support the mine roof. Once room and pillar mines have been developed to a
stopping point (limited by geology, ventilation, or economics), a
supplementary version of room and pillar mining, termed second mining or
retreat mining, is commonly started. Miners remove the coal in the pillars,
thereby recovering as much coal from the coal seam as possible. There are five
principal methods of underground mining:

1.5.2.1 Longwall mining: It accounts for about 50% of underground

production. The longwall shearer has a face of 1,000 feet (300 m) or more. It
is a sophisticated machine with a rotating drum that moves mechanically back

16
and forth across a wide coal seam. The loosened coal falls on to a pan line that
takes the coal to the conveyor belt for removal from the work area. Longwall
systems have their own hydraulic roof supports which advance with the
machine progress.

Figl.10 Under Ground Mine

1.5.2.2 Continuous Mining: It utilizes a machine with a large rotating steel

drum equipped with tungsten carbide teeth that scrape coal from the seam.
Operating in a room and pillar (also known as bord and pillar) system
where the mine is divided into a series of 20-to-30 foot rooms or work areas
cut into the coalbed. Conveyors transport the removed coal from the seam.

1.5.2.3 Blast Mining or Conventional Mining: It is an older practice that

uses explosives such as dynamite to break up the coal seam, after which the
coal is gathered and loaded on to shuttle cars or conveyors for removal to a
central loading area.

17
1.5.2.4 Shortwall mining: It is a method currently accounting for less than
1% of deep coal production, involves the use of a continuous mining machine
with movable roof supports, similar to longwall..

1.5.2.5 Retreat mining : It is a method in which the pillars or coal ribs used to
hold up the mine roof are extracted; allowing the mine roof to collapse as the
mining works back towards the entrance. This is one of the most dangerous
forms of mining owing to imperfect predictability of when the ceiling will
collapse and possibly crush or trap workers in the mine.

1.6 Coal Mining Machinery

Gold-bearing gravels are shoveled into a trommel at the Blue Ribbon placer
mine, Alaska.Heavy machinery is needed in mining for exploration and
development, to remove and stockpile overburden, to break and remove rocks
of various hardness and toughness, to process the ore and for reclamation
efforts after the mine is closed. Bulldozers, drills, explosives and trucks are all
necessary for excavating the land. In the case of placer mining, unconsolidated
gravel, or alluvium, is fed into machinery consisting of a hopper and a shaking
screen or trommel which frees the desired minerals from the waste gravel. The
minerals are then concentrated using sluices or jigs. Large drills are used to
sink shafts, excavate stopes and obtain samples for analysis. Trams are used to
transport miners, minerals and waste. Lifts carry miners into and out of mines,
as well as moving rock and ore out, and machinery in and out of underground
mines. Huge trucks, shovels and cranes are employed in surface mining to
move large quantities of overburden and ore. Processing plants can utilize
large crushers, mills, reactors, roasters and other equipment to consolidate the
mineral-rich material and extract the desired compounds and metals from the

ore.

18
Figl.ll Moving machinery (driller)

1.7 Various Types of Coals

We use the term "coal" [1091 to describe a variety of fossilized plant materials,

but no two coals are exactly alike. Heating value, ash melting temperature,
sulfur and other impurities, mechanical strength, and many other chemical and
physical properties must be considered when matching specific coals to a
particular application

1.7.1 Peat: It is considered to be a precursor of coal, has industrial

importance as a fuel in some regions, for example, Ireland and Finland. In its
dehydrated form, peat is a highly effective absorbent for fuel and oil spills on
land and water

1.7.2 Lignite: It is also referred to as brown coal, is the lowest rank of coal
and used almost exclusively as fuel for electric power generation. Jet is a
compact form of lignite that is sometimes polished and has been used as an
ornamental stone since the Iron Age .

19
1.7.3 Bituminous coal: It is dense mineral, black but sometimes dark brown,

often with well-defined bands of bright and dull material, used primarily as

fuel in steam-electric power generation, with substantial quantities also used

for heat and power applications in manufacturing and to make coke

1.7.4 Anthracite: It is the highest rank; a harder, glossy, black coal used
primarily for residential and commercial space heating. It may be divided
further into metamorphically altered bituminous coal and petrified oil, as from
the deposits in Pennsylvania

Tablel.9 Carbon percentage of various types of coals

Type of Coal | Carbon content Commonly known as

Peat 111%

Lignite 38% Soft coal / brown coal

Bituminous 65% Household coal

Anthracite 96% Hard coal

t
Anthracite coal

Composition

Primary carbon

sulphur, hydrogen,
Secondary
oxygen, nitrogen

Figl.12 Coal Composition

20
 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 Brief History of Coal Mining and Coal Deposits in India

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
 A Brief History of Coal Mining and Coal Deposits in India

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
 A Brief History of Coal Mining and Coal Deposits in India

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
 A Brief History of Coal Mining and Coal Deposits in India

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 State Railways

Collieries Collieries.
Company Non-Coking
Ltd. (SCCL) Coking Coal.
Coal.
Captive National Coal
Mines of
DVC. Develoupment
Corporation
(NCDC) 1956.
Non-Coking
May, 1972 May, 1973
Coal.
Coking Non-Coking
Coalmines Coalmines
Nationalized Nationalized

Bharat Coal Mines

Coking Coal Authority
Ltd. (BCCL) 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

TISCO / ECL, BCCL, CCL, NCL, WCL,

1945, SCCL SECL, MCL, CMPDIL
IISCO

48
 A Brief History of Coal Mining and Coal Deposits in India

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 non-
coking), 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
 A Brief History of Coal Mining and Coal Deposits in India

8
(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 BTUs-

50
 A Brief History of Coal Mining and Coal Deposits in India

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
 A Brief History of Coal Mining and Coal Deposits in India

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 non-
coking 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)
Grade
UHV= 8900-138 (A+M)
A Exceeding 6,200
B Exceeding 5,600 but not exceeding 6,200
C Exceeding 4,940 but not exceeding 5,600
D Exceeding 4,200 but not exceeding 4,940
E Exceeding 3,360 but not exceeding 4,200
F Exceeding 2,400 but not exceeding 3,360
G Exceeding 1,300 but not exceeding 2,400
Source: http:// www.coalindia.in
Gross Calorific Value (GCV) (Kcal/Kg)
(at 5% moisture level)
Exceeding 6,401
Exceeding 5,800 but not exceeding 6,401
Exceeding 5,400 but not exceeding 5,801
Exceeding 4,800 but not Exceeding 5,401
Exceeding 4,200 but not exceeding 4,801
Exceeding 3,600 but not exceeding 4,201
Exceeding 3,200 but not exceeding 3,601

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
 A Brief History of Coal Mining and Coal Deposits in India

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 non-
coking 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
 A Brief History of Coal Mining and Coal Deposits in India

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 As on Reserve (Million Tonnes)

Proved Indicated Inferred Total
Prime coking 01/04/2007 4,614 699 0 5,313
01/04/2008 4,614 699 0 5,313
Medium coking 01/04/2007 11,853 11,601 1,880 25,334
01/04/2008 12,308 12,136 1,880 26,324
Blendable / Semi coking 01/04/2007 482 1,003 222 1,707
01/04/2008 482 1,003 222 1,707

Non coking 01/04/2007 81,624 1,07,362 36,042 2,25,027

(including high sulphur) 01/04/2008 84,425 1,10,378 36,388 2,31,191

Total 01/04/2007 98,573 1,20,665 38,144 2,57,382

01/04/2008 1,01,829 1,24,216 38,490 2,64,535
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
 A Brief History of Coal Mining and Coal Deposits in India

Table 3.3: Geological Resources of Indian Coal by State and Depth as on April 1, 2008.
State Type of coal Depth Reserve (Million Tonnes)
Proved Indicated Inferred Total
West Bengal Medium Coking 0-1200 210.00 18.50 0.00 228.50
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
Jharkhand 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
Madhya Pradesh Medium Coking 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
Chhattisgarh 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
Uttar Pradesh All Non Coking 0-300 765.98 295.82 0.00 1061.80
Maharashtra All Non Coking 0-1200 5004.26 2821.66 1992.17 9818.09
Orissa All Non Coking 0-1200 19221.59 31728.09 14313.66 65263.34
A. Pradesh All Non Coking 0-1200 9007.13 6710.65 2978.81 18696.59
Sikkim All Non Coking 0-300 0.00 58.25 42.98 101.23
Assam Non Coking 0-1200 0.00 2.79 0.00 2.79
High Sulphur 0-1200 314.59 24.04 34.01 372.64
All 0-1200 314.59 26.83 34.01 375.43
Arunachal Pradesh All High Sulphur 0-300 31.23 40.11 18.89 90.23
Meghalaya All High Sulphur 0-300 88.99 69.73 300.71 459.43
Nagaland All High Sulphur 0-300 3.43 1.35 15.16 19.94
Prime Coking 0-1200 4614.35 698.71 0.00 5313.06
Medium Coking 0-1200 12307.51 12136.21 1880.23 26323.95
India Semi Coking 0-1200 482.16 1003.29 221.68 1707.13
Non coking 0-1200 83987.23 110242.52 36018.93 230248.68
High sulphur 0-1200 438.24 135.23 368.77 942.24
Total 0-1200 101829.49 124215.96 38489.61 264535.06
Terti ary Coal fields 0-1200 438.24 135.23 368.77 942.24

India (Total) 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
 A Brief History of Coal Mining and Coal Deposits in India

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
Gujarat
1/4/2008 785.27 259.40 1618.08 2662.75
1/4/2007 0.00 20.25 7.30 27.55
J&K
1/4/2008 0.00 20.25 7.30 27.55
1/4/2007 0.00 0.00 9.65 9.65
Kerala
1/4/2008 0.00 0.00 9.65 9.65
1/4/2007 0.00 405.61 11.00 416.61
Pondicherry
1/4/2008 0.00 405.61 11.00 416.61
1/4/2007 560.91 2620.60 1129.92 4311.43
Rajasthan
1/4/2008 639.69 2568.30 1276.84 4484.83
1/4/2007 2831.00 23387.42 5108.60 31327.02
Tamilnadu
1/4/2008 3399.39 22819.03 5108.60 31327.02
1/4/2007 0.00 0.29 0.86 1.15
West Bengal
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
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
 A Brief History of Coal Mining and Coal Deposits in India

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

57
 A Brief History of Coal Mining and Coal Deposits in India

Graphical presentation of World Coal Reserve

Figure 3.2: Pie Chart showing Reserves of Hard Coal in 2006 (in %)
3% 7%

14%
38% OECD
Tr. Economies
China
Asia Ex. China
L. America
Africa & M. East
23%

15%

Figure 3.3: Pie Chart showing Reserves of Lignite Coal in 2006 (in %)
0%
4% 0%
9%
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
China America
19% 40%

Transition
Economies
23%

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 A Brief History of Coal Mining and Coal Deposits in India

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

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18
coal producing countries are China, USA, Australia and India. 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
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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.

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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
6. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers
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.
10. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers
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.
14. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers
Organisation, Kolkata, pp. II. 1-2.
15. http:// www.easterncoal.gov.in
16. Coal Directory of India (2007-08), Govt. of India, Ministry of Coal, Coal Controllers
Organisation, Kolkata, p. X.1.
17. http://www.worldcoal.org/resources/coal-statistics / and http://icmlindia. com/global-
coal-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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