Demand & Supply of coal in India, Coal reserves, production, imports and consumption

1. Demand and Supply of Coal in India
Industry Information Insights 2014
EnergySector.in

2. Table of Contents
Coal Reserves
3
Coal Production
6
Coal Imports
10
Coal Consumption
12
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3. Coal Reserves
After nationalisation of coal mines in 1973, detailed coal exploration work on a large scale was initiated by Coal India Limited (CIL) through its subsidiary, Central Mine Planning & Design Institute (CMPDI).
Detailed exploration carried out by CMPDI and its agencies have increased proved reserves from 21.3 billion tonnes in 1972 to 123.18 billion tonnes in 2013.
India has the fifth largest coal reserves in the world.
Although it has the fifth largest reserves of coal in the world, it is not able to meet its domestic demand. Indian coal is characterized by high ash content and low sulphur content.
At the time of Independence, the known coal resources of India were 37.11 billion tonnes down to a depth of 600 m.
At the time of nationalisation in 1973, the task force of the Planning Commission estimated a total reserve of 81 billion tonnes (out of which 61 billion tonne was non- coking), for seams of thickness 1.2 m and above and down to a depth of 600 m.
As on
Proved
Indicated
Inferred
Total (BT)
1.4.2007
99.060
120.177
38.144
257.381
1.4.2008
101.829
124.216
38.490
264.535
1.4.2009
105.820
123.470
37.920
267.210
1.4.2010
109.798
130.654
36.358
276.810
1.4.2011
114.002
137.471
34.389
285.862
1.4.2012
118.145
142.169
33.183
293.497
1.4.2013
123.181
142.632
33.101
298.914
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4. Coal Reserves
Major coal bearing states in India include Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh and Andhra Pradesh.
From 2007 to 2013, total coal reserves in India increased at a CAGR of 2.52%. So far, a total of 298.914 billion tonnes of geological resources of coal have been estimated in India, up to the maximum depth of 1200 metre. Out of the total resources, the Gondwana coalfields account for 297.421 BT (99.5%), while the Tertiary coalfields of Himalayan region contribute 1.493 BT (0.5%) of coal resources. 257.381
264.535
267.210
276.810
285.862
293.497
298.914
230
240
250
260
270
280
290
300
310
1.4.2007
1.4.2008
1.4.2009
1.4.2010
1.4.2011
1.4.2012
1.4.2013
BT Trends in Coal Reserves
CAGR = 2.52%
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5. Coal Reserves
Type-wise Coal Reserves
Of the total reserves, nearly 88% are non-coking coal reserves, while tertiary coals reserves account for a meager 0.5 % and the balance is coking coal.
India has very limited reserves of coking coal which is a key raw material for the production of steel. Coking coal accounts for only 15% of India’s overall proven coal reserves. The Jharia coalfield, located in the state of Jharkhand, holds the majority of the coking coal reserves.
Out of total coal reserves, 41% are proved coal reserves, 48% are indicated coal reserves and remaining 11% are inferred reserves.
41%
48%
11%
Proved
Indicated
Inferred
11%
88%
1%
Total Coking
Non Coking
Tertiary Coal
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6. Coal Production
During the first 25 years of independence, growth in the coal production was very slow. From a level of around 30 million tonnes (MT) at the time of independence, coal production increased to only 73 MT in 1970-71.
India is the third largest coal producing country in the world after China and USA.
History of Coal Production
India was producing 6.12 MTPA of coal by 1900 and 18 MTPA by 1920.
The production got a sudden boost from the First World War but went through a slump in the early thirties. The production reached a level of 29 MT by 1942 and 30 MT by 1946.
At the beginning of the 1st Plan, annual production went up to 33 MT.
1900
6.12 MT 1920 18 MT
1942
29 MT
1946
30 MT
1951
33 MT
1971
73 MT
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7. Coal Production: Year-wise
Currently, the government enjoys a monopoly in producing coal with over 90% of the production coming from government controlled mines.
The policy for captive mining, introduced in 1993, opened the coal sector to private investment, however limited progress has been made in the captive coal blocks allotted by the government.
88% of coal is produced from opencast mines and 12% from underground mines.
The production of coal increased from a level of about 70 million tonnes at the time of nationalization of coal mines in early 1970's to 557.6 million tonnes in 2012-13.
The country’s coal production has increased from 457 MT in 2007-08 to 557.6 MT in 2012-13.
0 MT
100 MT
200 MT
300 MT
400 MT
500 MT
600 MT
Year-wise Coal Production Trend
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8. Coal Production: Plan-wise
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
0
100
200
300
400
500
600
1955-56
1960-61
1965-66
1973-74
1978-79
1984-85
1989-90
1996-97
2001-02
2006-07
2011-12
% MT
Terminal Year of FYP
Plan-wise Coal Production
Production (MT)
CAGR (%)
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9. Coal Production: Company-wise
Captive Blocks
Out of coal blocks allotted, only 38 blocks have started production and another 10 coal blocks are nearing production.
The combined production of coal from these blocks was only 36.167 MT in 2012-13.
Coal India Limited (CIL)
CIL is the single largest coal producer in the world. It produces around 81% of India's overall coal production, thus enjoy a near monopoly in the sector.
Two of the subsidiary companies of CIL, South Eastern Coalfields Limited and Mahanadi Coalfields Limited produce more than 100 million tonnes of coal.
Singareni Collieries Company Limited (SCCL)
SCCL is the main source for supply of coal to the southern region. The company produced 53.19 million tonnes of coal during 2012-13, which is 10% of India’s total coal production.
CIL Total 81%
SCCL 10%
Others 9%
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10. Coal Import
2008-09
2009-10
2010-11
2011-12
2012-13
Coking Coal
21.08
24.69
19.48
31.80
32.56
Non-coking Coal
37.92
48.56
49.43
71.05
105.00
Coke
1.88
2.35
1.49
2.36
3.07
Total Import
60.88
75.60
70.40
105.21
140.63
As per the present Import policy, coal can be freely imported under Open General License by the consumers themselves considering their needs based on their commercial prudence.
Coking Coal is imported by Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
Coat based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders import non-coking coal.
Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnace.
Country-wise Coal Imports
In India, majority of coal is imported from Indonesia, Australia and South Africa.
India is mainly dependent on Indonesia and South Africa for import of thermal coal and on Australia for coking coal. However, the new regulatory policies in these countries are increasing coal prices. This necessitates the requirement of intensive efforts in identifying new avenues for supply like Mozambique and others.
Indonesia 56%
Australia 21%
South Africa 14%
Others 9%
10

11. Coal Import
Even some of the India’s large power producers have shown a greater tendency to rely on imported coal to an extent despite the fact that domestic coal blocks have been allotted to most of their projects.
Presently, India ranks fourth in the coal import demand, being led by Japan.
Import of coal in India started in 1980-81 when only 0.55 MT was imported.
India is not able to meet its coal demand and import of coal from other countries has become inevitable.
Although India has the fifth largest reserves of coal in the world, it is not able to meet its domestic demand.
Since FY2009 to FY2013, India’s coal import has grown at a CAGR of 25.38%.
59.003
73.255
68.918
102.850
145.8
0
20
40
60
80
100
120
140
160
2008-09
2009-10
2010-11
2011-12
2012-13
MT
Gross Coal Imports
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12. Coal Consumption in India
Power 71%
Iron & Steel 11%
Cement 4%
Others 14%
Sector-wise Coal Consumption
Power generation is the largest consumer of coal in India, followed by iron & steel and cement.
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