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In India, 80% of mining is in coal and the balance 20% is in various metals and other raw materials such as gold, copper, iron, lead, bauxite, zinc and uranium. Coal has been a major contributor in providing energy security during the past century. But it is not a renewable resource, one day it will exhaust. It is possible that this pattern may change and there could be emphasis on uranium and thorium based power plants during the later part of the 21st century in addition to the emphasis on renewable energy sources.

Coal: Choice for Indian Energy

Coal is the most important & abundant fossil fuel in India and accounts for 55% of India's energy need. India's industrial heritage was built upon indigenous coal, largely mined in the eastern and the central regions of the country. India is, however, poorly endowed with oil assets and has to depend on crude imports to meet a major share of its needs (around 70 percent). A large population of India in the rural areas depends on traditional sources of energy such as firewood, animal dung and biomass. The usage of such sources of energy is estimated at around 155 mtoe per annum or approximately 47 percent of total primary energy use.

Coal has been recognized as the most important source of energy for electricity generation in India. About 75% of the coal in India is consumed in the power sector. In addition, other industries like steel, cement, fertilizers, chemicals, paper and thousands of medium and small-scale industries are also dependent on coal for their process and energy requirements. In the transport sector, though direct consumption of coal by the Railways is almost negligible on account of phasing out of steam locomotives, the energy requirement for electric traction is still dependent on coal converted into electric power.

The coal reserves of India up to the depth of 1200 m have been estimated by the Geological Survey of India at 247.85 billion tonnes as on January 1, 2005 of which 92 billion tonnes are proven. Hard coal deposits spread over 27 major coalfields, are mainly confined to eastern and south central parts of India.

The lignite reserves in India are estimated at around 36 billion tonnes, of which 90% occur in the southern State of Tamil Nadu. 4150 million tonnes (mt) spread over 480 sq km is in the Neyveli Lignite fields in Cuddalore District of which around 2360 Mt have been proved. Geological reserves of about 1168 mof lignite have been identified in Jayamkondacholapuram of Trichy District of Tamilnadu. In Mannargudi and East of Veeranam, geological reserves of around 22661.62 Mt and 1342.45 mt of lignite have been estimated respectively. Other states where lignite deposits have been located are Rajasthan, Gujarat, Kerala, Jammu and Kashmir and Union Territory of Pondicherry.

Inspite of various policy initiatives to diversify the fuel mix but considering the limited reserve potentiality of petroleum & natural gas, eco-conservation restriction on hydel project and geo-political perception of nuclear power, it is becoming increasingly evident that coal will continue to occupy centre-stage of India's energy scenario. Indian coal offers a fuel source to domestic energy market for the next century & beyond. Based on estimates, the consumption of coal is projected to rise by nearly 40 percent over the next five years and almost to double by 2020.

Policy Framework

Eligibility to do Coal Mining

Under the provisions in Section 3 (3) of Coal Mines (Nationalisation) Act, 1973, Coal mining was mostly reserved for the public sector. Amendments to Coal Mines (Nationalisation) Act, 1973 have been done to facilitate captive mining in approved end-use industries. The parties eligible to do coal mining in India without the restriction of captive consumption are:

i. The Central Government, a Government company (including a State Government company), a Corporation owned, managed and controlled by the Central Government.

ii. A person to whom a sub-lease has been granted by the above mentioned Government company or corporation having a coal mining lease, subject to the conditions that the coal reserves covered by the sub-lease are in isolated small pockets or are not sufficient for scientific and economic development in a coordinated manner and that the coal produced by the sub-lessee will not be required to be transported by rail.

Coal Mining Lease under the Mines and Minerals (Regulation & Development) Act, 1957

Under the provisions of Section 5 (2) of the Coal Mines (Nationalisation) Act, 1973, the Coal India Limited enjoys the status of becoming the deemed lessee of the concerned State Governments in relation to all the nationalised coal mines. Under the provisions of Section 11 (2) of the Coal Bearing Areas (Acquisition & Development) Act, 1957 also, the Coal India Limited acquires the same status of becoming deemed lessee of the concerned State Governments in relation to the lands over the coal bearing areas acquired under this Act. The deemed leases being in the nature of statutory leases, the Coal India Limited does not have to obtain separate leases under the MMRD Act, 1957 from the concerned State Government in respect of the nationalised mines and the coal bearing lands acquired under the CBA Act.

However, in case any of the companies eligible to do coal mining in India including CIL and the other Government and private coal companies want to acquire coal bearing lands under the Land Acquisition Act, 1894, they will be required to obtain coal mining leases from the concerned State Governments under the MMRD Act, 1957. Coal being a mineral listed in the First Schedule of the MMRD Act, 1957, the State Governments can grant coal mining leases only with the previous approval of the Central Government accorded under the proviso to Section 5 (1) of MMRD Act.

Before the previous approval of the Central Government is accorded, the coal mining company is required to get the mining plan for the proposed coal mining area approved from the Central Government. The coal mining leases under the MMRD Act are now granted for 20-30 years initially and can be renewed for a further period of 20 years with the previous approval of the Central Government. The coal mining leases under the MMRD Act, 1957 are ordinarily subject to a ceiling of 10 sq. kms area.

Inventory of Coal Resources of India

As a result of exploration carried out up to the depth of 1200m by the GSI and other agencies, a cumulative total of 247.85 Billion tonnes of coal resources have been estimated in India as on January 1, 2005.

The state-wise distribution of coal resources and its categorisation:

State

Coal Resources in Million Tonnes

Proved

Indicated

Inferred

Total

Andhra Pradesh

8263

6079

2584

16926

Arunachal Pradesh

31

40

19

90

Assam

279

27

34

340

Bihar

0

0

160

160

Chhattisgarh

9373

26191

4411

39975

Jharkhand

35417

30439

6348

72204

Madhya Pradesh

7513

8815

2904

19232

Maharashtra

4653

2309

1620

8582

Meghalaya

117

41

301

459

Nagaland

4

1

15

20

Orissa

15161

30976

14847

60984

Uttar Pradesh

766

296

0

1062

West Bengal

11383

11876

4554

27813

Total

92960

117090

37797

247847

For detailed & updated information on the Indian Coal Sector, refer to the report - 'Overview of Coal Sector in India 2005'

Categorisation of Resources

The coal resources of India are available in sedimentary rocks of older Gondwana Formations of peninsular India and younger Tertiary formations of northern/ north-eastern hilly region. Based on the results of Regional/ Promotional Exploration, where the boreholes are placed 1-2 Km apart, the resources are classified into Indicated or Inferred category. Subsequent Detailed Exploration in selected blocks, where boreholes are placed less than 400 meter apart, upgrades the resources into more reliable Proved category.

Formation wise and Category-wise coal resources of India as on January 1, 2005:

 (in Million Tonnes)

Formation

Proved

Indicated

Inferred

Total

Gondwana Coals

92528

116984

37428

246940

Tertiary Coals

432

106

369

907

Total

92960

117090

37797

247847

Type-wise and Category-wise coal resources of India as on January 1, 2005:

(in Million Tonnes)

Type of Coal

Proved

Indicated

Inferred

Total

(A) Coking :-

     -Prime Coking

4614

699

-

5313

     -Medium Coking

11417

11765

1889

25071

     -Semi-Coking

482

1003

222

1707

Sub-Total Coking

16513

13467

2111

32091

(B) Non-Coking*:-

76447

103623

35686

215756

Total (Coking & Non-Coking)

92960

117090

37797

247847

* Including all coals of North Eastern Region.

For detailed & updated information on the Indian Coal Sector, refer to the report - 'Overview of Coal Sector in India 2005'

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