Historical Perspective

India has a long history of commercial coal mining covering nearly 230 years starting from 1774 by M/s Sumner and Heatly of East India Company in the Raniganj Coalfield along the Western bank of river Damodar. However, for about a century the growth of Indian coal mining remained sluggish for want of demand but the introduction of steam locomotives in 1853 gave a fillip to it. Within a short span, production rose to an annual average of 1 million tonne (mt) and India could produce 6.12 mts per year by 1900 and 18 mts per year 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 mts by 1942 and 30 mts by 1946.

With Independence, India embarked upon the 5-year development plans. At the beginning of the 1st Plan, annual production went upto 33 mts. During the 1st Plan period itself, the need for increasing coal production efficiently by systematic and scientific development of the coal industry was being felt. Setting up of the National Coal Development Corporation (NCDC), a Government of India Undertaking in 1956 with the collieries owned by the railways as its nucleus was the first major step towards planned development of Indian Coal Industry. Along with the Singareni Collieries Company Limited (SCCL) which was already in operation since 1945 and which became a Government company under the control of Government of Andhra Pradesh in 1956, India thus had two Government coal companies in the fifties. SCCL is now a joint undertaking of Government of Andhra Pradesh and Government of India sharing its equity in 51:49 ratio.

However, coal production in the first two decades after independence was very slow. Annual production was stagnant at 70 million tonnes during late sixties and early seventies and was inadequate to meet the growing demand of coal for generation of power and for other industrial and metallurgical purposes. The oil crisis of early seventies spurred the GoI into taking a hard look at the coal sector.

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

Nationalisation of Coal Mines

Right from its genesis, the commercial coal mining in modern times in India has been dictated by the needs of the domestic consumption. On account of the growing needs of the steel industry, a thrust had to be given on systematic exploitation of coking coal reserves in Jharia Coalfield. Unsatisfactory mining conditions e.g. slaughter mining, violation of mine safety laws, industrial unrest, failure to make investments in mine-development, reluctance to mechanise etc. prevailed in the coal mines. Adequate capital investment to meet the burgeoning energy needs of India was not forthcoming from the private coal mine owners. Unscientific mining practices adopted by some of them and poor working conditions of labour in some of the private coal mines became matters of concern for the Government.

Recognising the importance of coal, a primary source of energy in the national economy and the massive investment needed to meet the long term requirements of coal in India, coal industry in India was nationalised in phases in 1972 and 1973. The primary goal for nationalised coal industry was to ensure a scientific approach to exploration and exploitation of coal deposits with due attention to safety, conservation and management of environmental aspects while accelerating the production level through substantial investment so as to reduce India's dependence on oil.

The Coking Coal Mines (Emergency Provisions) Ordinance was promulgated by the Government of India on October 16, 1971 under which except the captive mines of TISCO and IISCO, the management of all coking coal mines was taken over by the Government. A new company called Bharat Coking Coal Limited was formed as a subsidiary company of Steel Authority of India Limited to manage the taken over mines. These mines were subsequently nationalised w.e.f. May 1, 1972.

Later on the management of 711 coal mines was also taken over by the Government with effect from January 31, 1973 and they were nationalised w.e.f. May 1, 1973 and a new Government Company namely, Coal Mines Authority Limited (CMAL) with headquarters at Kolkata, was set up by the Government in May, 1973 to manage non-coking coal mines. The CMAL was organised as a unitary structure on divisional pattern with four Divisions, the Central Division, the Eastern Division, the Western Division and the CMPDIL. The mines of erstwhile National Coal Development Corporation were brought under the Central Division of the CMAL.

In September, 1975 CIL was formed as a Holding Company with five subsidiaries namely Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Eastern Coalfields Limited (ECL), Western Coalfields Limited (WCL) and Central Mine Planning and Design Institute Limited (CMPDIL).

In view of the projected increase in production and investment contemplated for CCL and WCL group of coal mines and in view of their extensive geographical spread resulting in day to day administrative, technical and communication problems etc. two more coal companies, namely, Northern Coalfields Limited and South Eastern Coalfields Limited were formed w.e.f. November 28, 1985.

Considering the prospects of Orissa Coalfields, being the growth centre for the VIII and IX Plan periods, a new coal company was formed bifurcating South Eastern Coalfields Limited (SECL). The new company Mahanadi Coalfields Limited was incorporated on April 3, 1992 with its headquarters at Sambalpur (Orissa) as fully owned subsidiary of Coal India Limited to manage the Talcher and IB-Valley Coalfields in Orissa.

Legislative History of Coal Mining

The nationalisation was done in two phases, the first with the coking coal mines in 1971-72 and then with the non-coking coal mines in 1973. In October, 1971, the Coking Coal Mines (Emergency Provisions) Act, 1971 provided for taking over in public interest of the management of coking coal mines and coke oven plants pending nationalisation.

This was followed by the Coking Coal Mines (Nationalisation) Act, 1972 under which the coking coal mines and the coke oven plants other than those with the Tata Iron & Steel Company Limited and Indian Iron & Steel Company Limited, were nationalised on May 1, 1972 and brought under the Bharat Coking Coal Limited (BCCL), a new Central Government Undertaking.

Another enactment- the Coal Mines (Taking Over of Management) Act, 1973, extended the right of the Government of India to take over the management of the coking and non-coking coal mines in seven States including the coking coal mines taken over in 1971. This was followed by the nationalisation of all these mines on May 1, 1973 with the enactment of the Coal Mines (Nationalisation) Act, 1973 which now is the piece of Central legislation determining the eligibility of coal mining in India.

Amendment to allow Captive Coal Mining

The 1973 Coal Mines Nationalisation Act was amended on May 27, 1976 to allow captive coal mining by private companies engaged in the production of iron and steel and sub-leasing to private parties of isolated small pockets not amenable to economic development and not requiring rail transport. In 1993 the Act was further amended to allow captive coal mining in the private sector for power generation, washing of coal obtained from a mine and such other end uses as may be notified by the Central Government from time to time. Cement production was subsequently notified as a specified end-use for the purposes of captive coal mining.

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

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