India’s Energy Scenario & Coal

India is currently among the top three fastest growing economies of the world. As a corollary, India's energy needs too are fast expanding with its increased industrialisation and capacity addition in power generation. This is where 'coal' steps in, as the most dominant energy source in India's energy scenario.

Coal India Limited at a glance

Coal India Limited (CIL) - a Schedule 'A' 'Navratna' Public Sector Undertaking under Ministry of Coal, Government of India, has its Headquarters in Kolkata, West Bengal. We produce non-coking coal and coking coal of various grades for diverse applications.

As of March 31, 2010, we operated 471 mines in 21 major coalfields across eight states in India, including 163 open cast mines, 273 underground mines and 35 mixed mines (includes both open cast and underground mines). We also operated 17 coal beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million tons per annum. We intend to develop an additional 20 coal beneficiation facilities with an aggregate additional proposed feedstock capacity of 111.10 million tons per annum. Besides this, we provided 85 hospitals and 424 dispensaries.

The Indian Institute of Coal Management (IICM) operates under CIL and imparts multi disciplinary management development programs executives.

Coal India's major consumers are the power and steel sectors. Others include cement, fertiliser, brick kilns etc.

Mission of Coal India Limited

The Mission of Coal India Limited is to produce the planned quantity of coal, efficiently and economically with due regard to safety, conservation and quality.

Corporate Structure and Subsidiary Companies

Our Company has nine direct Subsidiaries and two indirect Subsidiaries as listed below:

Direct Subsidiaries: Indian

1. Bharat Coking Coal Limited;



2. Central Coalfields Limited;



3. Central Mine Planning and Design Institute Limited;



4. Eastern Coalfields Limited;



5. Mahanadi Coalfields Limtied;



6. Northern Coalfields Limited;



7. South Eastern Coalfields Limited;



8. Western Coalfields Limited.

Direct Subsidiaries: International

1. Coal India Africana Limitada.

Indirect Subsidiaries (held through our subsidiary, Mahanadi Coalfields Limited)

1. MJSJ Coal Limited; and



2. MNH Shakti Limited.

History of Coal India Limited

In order to provide for a higher growth in coal sector to meet the growing energy needs of the country, the Government in 1973, nationalized the coal mines by enacting the Coal Nationalization Act. Pursuant to the nationalization of coal mines, our Company was incorporated as a private limited company with the name of 'Coal Mines Authority Limited', under the Companies Act on June 14, 1973, and in terms of notification no. G.S.R. 345(F) dated July 9, 1973, issued pursuant to the provisions of Section 5 of the Coal Nationalization Act certain nationalized coal mines were vested in our Company by the Central Government. Thereafter in 1975, Department of Coal, Ministry of Energy, GoI, with a view to integrate and streamline the structural set up in a manner which could be conducive to a more efficient administration, issued letter no. 38011/1/1/74-CAF dated September 27, 1975, providing for the re-organisation of 'Coal Mines Authority Limited' as 'Coal India Limited', which was to be responsible for the entire coal mining sector owned and controlled by the Central Government.

Pursuant to the nationalization of coal mines and during the period upto 1991, our Company was able to enhance the growth rate of coal production from a CAGR of 2.18% at the time of nationalisation in Fiscal 1974 to a CAGR of 5.63% by Fiscal 1991. However during this period, due to certain macro-economic and socio economic factors, our Company continued to operate certain legacy mines inherited pursuant to the nationalization and to operate certain new projects irrespective of financial viability. Further, on account of certain internal reasons and policy issues, our Company's accumulated losses in Fiscal 1991 and overdue liabilities to the Government in Fiscal 1993, reached Rs. 24,989.80 million and Rs. 23,113.10 million respectively. Thereafter, post 1991 upon our Company achieving certain milestones and certain policy changes initiated by the Government our Company endeavoured to consolidate its financial position. The 'Major Events and Milestones' of our Company since inception is listed below.

Major Events and Milestones :

2009-10 :	Award of the Scope Excellence Award to our Company by the Standing Conference of Public Enterprises for the year 2007-08. Establishment of Coal India Africana Limitada, a foreign subsidiary in Mozambique; Conversion of our Company into a public limited company. Award of 'Mini Ratna' status by the Department of Public Enterprises, GoI, to CMPDIL. Receipt by our Company of a composite score of 1.47 and rating as "excellent" for the year 2007-2008 by Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, GoI.
2008-09 :	Award of 'Navratna' status to our Company by the Department of Public Enterprises, GoI, for our operational efficiency and financial strength, which affords greater operational freedom and autonomy in decision making. Overall production of coal by our Company and our Subsidiaries, crossed 400 million tonnes.
2007-08 :	Award of 'Mini Ratna' status by the Department of Public Enterprises, GoI, to CCL.
2006-07 :	Award of 'Mini Ratna' status by the Department of Public Enterprises, GoI, to our Company and to MCL, NCL, SECL and WCL. Decline in debt as a percentage of net worth from 66 % in 2001-2002 to 10 % in 2006 -2007.
2005-06 :	Rating of 'AAA/Stable', indicating highest degree of safety with regard to timely payment of interest and principal, awarded by CRISIL in respect of the Rs. 250 million bond programme of our Company. Introduction of sale of coal through 'e-auction method'; ECL and BCCL reported profit of Rs. 3,638 million and 2,026.67 million in Fiscal 2006.
2003-04 :	Overall production of coal by our Company and our Subsidiaries crosses 300 million tonnes.
2001-02 :	Laying down of a minimum internal rate of return of 12% at 85% capacity utilization as cut off for the development of a project.
1997-98 :	Corporatization of the financial flow between our Company and Subsidiaries, such that our Company is to receive only dividends under applicable policy from our Subsidiaries and the corpus of our Company was to be utilized to provide strategic support to a loss making entity only for, inter alia, maintaining their productive capital assets. Sanction of loan of USD 1.03 billion from the World Bank and the Japanese Bank for International Co-operation for implementing 24 highly viable open case projects with global sourcing of equipments, of which USD 484.40 million was availed during the period between Fiscal 1998 to Fiscal 2004.
1996-97 :	Rating of 'A+', indicating adequate safety with regard to timely payment of interest and principal, awarded by CRISIL in respect of the Rs. 4,000 million bond issue by our Company. Adoption of financial viability as the basis for approval of coal development projects. Discontinuation of retention prices scheme and the Coal Price Regulation Account (CPRA), with the deregulation in prices of certain grades of coal.
1995-96 :	Approval of a financial restructuring package by the Government, whereby Rs. 8,917 million of interest liability was waived, Rs. 9,041.8 million of plan loan repayment arrears was converted to preference equity and Rs. 4,326.4 million of non plan payment arrears were allowed a moratorium for repayment and interest accrual for a period of three years, to be repaid in three equal instalments. A profit of Rs. 6,116 million in Fiscal 1996 was earned by our Company.
1992-93 :	Formation of MCL as our Subsidiary to manage mines Talcher and IB valley in the state of Orissa.
1991-92 :	Uptrend of profit started in 1991 and our Company earned a profit of Rs. 1,670 million in Fiscal 1992. Overall production of coal by our Company and our Subsidiaries crossed 200 million tonnes. Fixing of coal prices once a year to compensate for increase in price of inputs on a normative cost basis, and adoption of the escalation formula prescribed by the Bureau of Industrial Cost and Prices ("BICP").
1987-88 :	'Blasting Gallery Method' introduced at East Katras mine under BCCL and Chora mine under ECL.
1985-86 :	Formation of NCL and SECL as Subsidiaries of our Company, to manage certain mines managed by WCL and CCL.
1981-82 :	Introduction of retention prices of coal by amending the Colliery Control Order, 1945 by notification dated March 31, 1982, in respect of our Subsidiaries.
1980-81 :	Construction of five new washeries: Moonidih washery, Ramgarh washery, Mohuda washery, Barora washery, Kedla washery. Overall production of coal by our Company and our Subsidiaries crossed 100 million tonnes.
1979-80 :	Construction of the low temperature carbonized plant started in Dankuni Coal Complex. The pricing policy of CMPDIL was reviewed to ensure that the company was working on a commercial line instead of working on "no profit no loss" basis.
1975-76 :	Change of name of our Company to 'Coal India Limited'. Incorporation of CMPDIL, ECL and WCL, and formation of BCCL, CCL, CMPDIL, ECL and WCL, as our Subsidiaries.
1973-74 :	Nationalization of coal mines, in order to provide for a higher growth in coal sector to meet the growing energy needs of the country. Incorporation of our Company as 'Coal Mines Authority Limited'.

Material Agreements/Joint Ventures/MOUs

• Agreement between our Company and Indian Oil Corporation Limited, IBP Division ("IOCL-IBP") for the supply of bulk loading explosives to our Subsidiaries.



• Agreement between our Company and Mitsui & Co. Limited ("Mitsui") for the supply of OTR Tires to NCL.



• Memorandum of Understanding between CMPDIL and our Company for 2010-2011.



• Memorandum of Understanding between our Company and Rail India Technical & Economic Services Limited ("RITES") for provision of management consultancy services.



• Joint Venture Agreement dated September 27, 2007 with BEML Limited and Damodar Valley Corporation.



• Joint Venture Agreement dated October 12, 2009 with NTPC.



• Joint Venture Agreement dated January 14, 2009 with Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, NMDC Limited and NTPC Limited.



• Memorandum of Understanding dated January 10, 2008 with GAIL (India) Limited ("GAIL") and



• Memorandum of Intent dated December 14, 2009 with GAIL and Rashtriya Chemicals and Fertilizers Limited ("RCF").