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Production of raw coal touched 396.53 MT during April-November 2017-18

KOLKATA, Dec 30: The production of raw coal in the country during April-November 2017-18 was 396.53 MT compared to 388.68 MT during the corresponding period of previous year.

The overall growth in coal production during April- November, 2017 was two  per cent.

Coal production and coal dispatch/off-take of Coal India Limited (CIL), the state sector coal mining company, during April-November 2017-18 was 329.30 MT and 367.98 MT respectively.

Production and dispatch growth of CIL was 1.8 per cent and 8.1 per cent respectively during April-November 2017-18.

Generally, it is observed that coal production slows down considerably between June September every year.

This trend is evident this year also and the downswing has been greater than previous years due to excessive rain in coal mining areas.

The production has picked up from October onwards.

The reason for the shortfall in achievement of the production target set for the year 2017-18:  EC & FC problems in some mines, land acquisition and R&R problem, excessive rainfall in August and September, law and order problem mainly in CCL & MCL, evacuation problem and accumulation of high stock due to less lifting of coal by consumers upto July 2017

Under the provisions of the Coal Mines (Special Provisions) Act, 2015 and Rules made there under, so far 84 coal mines (53-Allotment, 31-Auction) have been successfully allocated.

Out of which, allotment order/vesting order has been issued so far in respect of 80 coal mines including Allotment order that is issued wrt Amelia coal mine in the year 2017.

Out of the 17 (Schedule II) coal mines under the provisions of the Coal Mines (Special Provisions) Act, 2015, 12 coal mines are operational and remaining Schedule II coal mines are awaiting various clearances for operationalisation.

Further, out of the 14 (Schedule III) coal mines, one coal mine has been granted Mining Opening Permission and remaining Schedule III coal mine are scheduled to be operational from 2018 onwards as they were not operational at the time of their allocation.

Out of the 18 (Schedule II) coal mines allotted to Public Sector Undertakings (PSUs)/GENCOS, three coal mines are operational and remaining Schedule II coal mines are awaiting various clearances/judgment for operationalisation.

Further, out of 35 (Schedule III-25 + Schedule I-10) coal mines, two coal mines of schedule III have been granted Mining Opening Permission. Remaining Schedule III & I coal mines are scheduled to be operational from 2018 onwards as they were not operational at the time of their allocation.

Since allotment, a total of 36.25 MT coal has been produced till October, 2017 from the operational coal mines allocated under the Coal Mines (Special Provisions) Act’ 2015 and rules made there under. Further, a total revenue of Rs 4109.31crore (excluding royalty, cess, taxes etc.) has been generated till November, 2017 from the above said coal mines.”

A High Power Expert Committee has been constituted on December 18 last to examine efficacy and challenges of the current bidding system to suggest changes for conducting future auction of coal mines.

A Technical Committee has been constituted on November 29 last to operationalise the methodology for flexibility in utilisation of coal extracted from the coal mines allotted under the CMSP Act, 2015 for optimum utilization of coal mine for the same end uses in the public interest and to achieve cost efficiencies. So far, two meetings have been held by the said Committee.

Two-level Monitoring Committee (level-1 under chairmanship of Minister of Coal and level-2 under chairmanship of Secretary (Coal) has been constituted for review of development/operationalisation of coal blocks with Ministry of Environment, Forest & Climate Change and Chief Ministers of concerned States alongwith concerned officials on  quarterly basis.

The said committee will meet once a month to review the operationalisation of allocated coal blocks.

A Scrutiny Committee has been constituted to consider/examine the submissions/replies made by Successful Bidders/Allottees of the coal mines in respect of deviation from the Efficiency Parameter as mentioned in the CMDPA/Allotment Agreement. So far, four meetings have been held by the said Committee.

Directions have been issued by the Central Government to Nominated Authority vide O.M. dated September 27, 2017 for allotment of 50 per cent of North of Arkhapal Srirampur (Northern Part) under Rule 8(2)(a)(ii) and Rule 11(1)of the Coal Mines (Special Provisions) Rules, 2014 for specified end use ‘ Production of fertilizer’.

Also, directions have been issued by the Central Government to Nominated Authority vide O.M. dated April 24, 2017 for allotment of Kotre Basantpur and Pachmo, Schedule-I coal mines located in the State of Jharkhand to Coal India Limited in accordance with the provisions of Section 5(1) of the Coal Mine (Special Provisions) Act, 2015 read with Rule 11(10) of the Coal Mine (Special Provisions) Rules, 2014.

Further, vide O.M. dated March 30, 2017 directions have also been issued by the Central Government to Nominated Authority for allocation of 13 (Schedule II and Schedule III) coal mines / blocks through e-auction under Section 4 or allotment under Section 5 of the CM(SP) Act, 2015 for the end-use ‘Iron & Steel, Cement and Captive Power Plants [excluding steel (coking)]’.

In addition, vide O.M. dated March 30, 2017, directions have also been issued by the Central Government to Nominated Authority for allocation of 06 Schedule III coal mines through e-auction under Section 4 or allotment under Section 5 of the CM(SP) Act, 2015 for the end-use ‘Production of Iron and Steel’.

Under the provisions of the Coal Mines (Special Provisions) Act, 2015 and Rules made thereunder, auction of coal mines for sale of coal will be undertaken. Accordingly, CCEA Note on the methodology for auction of Coal Mines / Blocks for sale of coal under the Coal mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development & Regulation) Act, 1957 has been sent to Cabinet Secretariat on October 26/27,2017 for consideration by the CCEA. Post approval of the methodology by the CCEA, auction of coal mines for sale of coal will be undertaken.

The Ministry has formulated a methodology to provide the coal block allottee PSU’s with some flexibility in utilization of coal extracted from the coal mines allotted under the Coal Mines (Special Provisions) Act, 2015 for optimum utilization of coal mine for the same end uses in the public interest and to achieve cost efficiencies.

Coal Blocks Development & Production Agreements for three coal blocks, viz. Pachwara South, Kerwa and Brahmani have been signed on February 22, 2017, August 18, 2017 and September 4, 2017 respectively.

The Coal Blocks Allocation Rules, 2017 (CBA Rules) have been notified on July 13, 2017 have repealed the Auction by Competitive Bidding of Coal Mines Rules, 2012 (ACBCM Rules).  However, the allocations already made under ACBCM Rules, 2012 has been maintained under the CBA Rules.

Rule 17 of the CBA Rules states that any action taken under the ACBCM Rules shall be deemed to have been done or taken under the corresponding provisions of these rules and any process of allocation pending under the ACBCM Rules, 2012 shall continue and after the final allocation of the coal block the remaining procedure and conditions under the corresponding provisions of CBA Rules shall be applicable.

A Committee has been constituted under the Chairmanship of Additional Secretary, Ministry of Coal to identify additional coal / lignite blocks for allocation under Rule 3(2) of the CBA Rules.

Previous approval of the Central Government under Sections 5(1) of the MMDR Act, 1957 for grant of prospecting licence in favour of Gujarat Mineral Development Corporation Ltd. in respect of Panandhro Extension lignite block has been granted on February 24, 2017.

Previous approval of the Central Government under Sections 5(1) and 6 (1)(b) of the MMDR Act, 1957 for grant of prospecting licence in favour of Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL) in respect of Kente Extension coal block has been granted on March 16, 2017.

In-principle allotment of Vastan coal block in favour of M/s Gujarat Industries Power Company Limited (GIPCL) has been cancelled on September 4, 2017.

Gondbahera Ujheni coal block allotted to Madhya Pradesh Power Generating Company Ltd. under the provisions of MMDR Act and ACBCM Rules, 2012 has been de-allocated on September 25, 2017. The same was done on the basis of request received from Government of Madhya Pradesh since the cost of coal extraction from the said block was envisaged to be too high than the CIL’s notificed price.

Deocha-Pachami block was decided to be jointly allocated to the entities of six State viz. West Bengal, Karnataka, Bihar, Uttar Pradesh, Punjab and Tamil Nadu. Due to joint allocation, difficulties were being faced in operationalization of the block.

On the suggestion of various joint venture partners and in view of request received from West Bengal Government, it was decided with the approval of competent authority to allocate Deocha-Pachami coal block to one State and separate coal blocks to each of the other States in terms of their requirement. Accordingly, Deocha Pachami coal block has been de-allocated on December 5, 2017.

New More Transparent Coal Allocation Policy for Power Sector, 2017- SHAKTI has been issued on May 22, 2017. Clearance has been given to CIL to sign Fuel Supply Agreement (FSA) with 4 Letter of Assurance (LoA) holders having total commissioned capacity of 3570 MW. Coal supply to 19,000 MW (out of 68,000 MW) which could not be commissioned by March 31, 2015 has started for commissioned plants.

Ministry of Coal has approved linkages for six Central PSUs and four State PSUs on the recommendations of Ministry of Power.

Linkage auction for Independent Power Producers (IPPs) having Power Purchase Agreement (PPA) based on domestic coal conducted from September 11 to 13, 2017. Maximum Allocable Quantity was 27.18 MT. Almost all the allocable quantity of 27.18 MT was booked with only 402 tons remaining un-booked.

Auction process of Linkages for IPPs without PPA has been initiated.

CIL has requested from CEA for the probable list of participants along with capacity.

Online public notification for interested bidders has been issued by CIL on October 6, 2017.

Policy for auction of Linkages to Non-regulated Sector was issued on February 15, 2016. All allocations of Linkages/LoAs for non-regulated sector viz. Cement, Steel/Sponge Iron, Aluminium and others (excluding Fertilizer (urea) sector), including their Captive Power Producers (CPPs), shall be auction based.

Tenure of new Fuel Supply Agreements (FSAs) subject to a maximum of 15 years.

In tranche I, II & III a total of 40.24 MT was booked. The percentage gain over notified price of non-power is 8.58 per cent. Total numbers of successful bidders were 719.

In order to address the concerns of coal consumers regarding the grade slippages and other quality issues, a third party sampling procedure has been put in place wherein a tripartite Memorandum of Understanding (MoU) has been signed by the coal company, the coal consumer and CIMFR for sampling and testing of coal at the loading end.

Against Tripartite Agreement of about 513 Million Tons signed by CIMFR with Power Sector, sampling has been commenced for about 492 Million tons (96 per cent of the total agreement signed). Further, against Tripartite Agreement signed for 20 Million Tons for Special Forward and Linkage Auction schemes, sampling has been commenced for a quantity of about 14 million tons by QCI (70 per cent of the total agreement signed).

The sampling and testing charges are borne equally by the buyer and the seller. The states/gencos are using this platform of third party sampling for quality assurance.

Inter-Ministerial Task Force was constituted in June, 2014 for review of existing coal sources as also feasibility for rationalization of these sources with a view to optimize transportation cost.

Coal Linkage rationalisation in Power sector has resulted in decrease in transportation cost of coal from the mines to the power plants leading to more efficient coal based generation of power.

Total coal movement rationalisation of 54.76 MT has taken place with annual potential savings of Rs 3354 crore.

Consequent upon the CCEA’s authorisation, the Alternative Mechanism approved the composition of new exchange traded fund namely Bharat 22 ETF with 22 constituent entities including CIL and NLCIL. As directed by DIPAM, 19299613 number of shares of CIL and 3974665 number of Shares of NLCIL were transferred to DIPAM’s Pooled Escrow demat account at a total value of Rs 545.91 crore during November, 2017.

Alternative Mechanism in its meeting held on March 21, 2017 approved the proposal to divest 15 per cent paid-up equity capital in NLC India Limited out of Government of India shareholding in NLCIL.

Further, DIPAM vide OM dated October 24, 2017 informed that the Alternative Mechanism (AM) has approved the sale of five per cent paid up equity capital in NLC India Limited out of 15 per cent approved.

Accordingly 76814501 no of shares were transferred for the Offer For Sale including Offer For Sale for employees during October-November, 2017.

NLCIL announced the buyback of not exceeding 14,91,41,173 fully paid equity shares with an open date of March 6, 2017 and close dated of March 20, 2017.

MOC has tendered 14,91,41,173 equity shares of NLC India Ltd. for buyback and out of 14,91,41,173 equity shares tendered by MoC, 14,45,46,266 were transferred in buyback and Rs 1429.38 crore were transferred to DIPAM as Buyback proceeds.

Inter-Company Safety Audit of all the 366 operative mines of CIL was completed during Jan-April 2017 and Mines were categorized in high, medium and low category. The Mitigation plan along with time line for mines has been identified.

In order to ensure despatch of quality coal to the consumers, exercise of re-gradation of coal seams of Coal Companies was taken up by Coal Controller organisation (CCO). In respect of CIL, CCO drew samples in respect of 392 mines.

In respect of exploration of coal, for 2017-18, a target of 12.50 lakh metre of drilling (Departmental: 4.75 lakh metre, Outsourcing: 7.75 lakh metre) was envisaged. As against this, 8.21 lakh metre of drilling has been carried out upto the month of November 17 against the target of 7.38 lakh metre. (AGENCIES)

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