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Coal Mining and Regulations - A symbiotic relationship, Shri Saurabh Priyadarshi, General Manager, Business Development and Chief Geologist, Indiabulls

Dark Coal or Bright Future

We live in a world made up of finite natural resources which cannot be replenished. Countries across the globe are developing technologies to explore and exploit repositories of natural resources at a breakneck speed to feed their blast furnaces, cement kilns, boilers and associated industries.

Natural resources have been exploited since time immemorial. These resources have been worked out and extractive processes were in place to transform the resources into products to meet the demands of society. The society has ever since been graduating and its appetite for more has never whetted. The end result: a steady decline in the global natural resources inventory.

Time will pass and so will our resources. It is quite the right time to appreciate the resultants of principled exploitation of resources or else, the very existence of living organism would be at stake. Examples of polar ice melt or ozone depletion to name a few are very unnerving. Dinosaurs and cockroaches were assumed to have coexisted but the inability and reluctance of dinosaurs to adapt to change saw them fade into oblivion.

World over, judicious and scientific exploitation of resources is mandated by the governments of the nations and the constituent states as a major thrust area to achieve sustainable development.

The industries too must adapt measures to utilise natural resources with utmost care and concern, lest we face the fear of mineral resources being dinosaur-ed. I have no wish to be christened as a mineral Nostradamus.

It is imperative that the regulations in the mineral industry be complied with so as to facilitate scientific exploitation, development and conservation of minerals, inclusion of local populace, protection of environment from adverse impacts of mining and keep pace with industrialisation.

Taking coal as an example, there is a war cry for establishing coal-based industries but very few have been able to deliver the projects conceived by them.

Global Coal Repository

Coal occurrence is spread over the world with major repositories in the United Sates followed by Russia, China, Australia and India. These reserves are expected to fire coal-based industries for 119 years at current RP (Reserve to Production) rate by the end of 2009. Please refer to Fig. 1 for the graphics.

Fig 1 - Global coal reserves in 2009

(Source: Infraline Database)

Indian Coal Industry

Indian coal is spread over an area of 648 sq. kms. A total of 276.81 billion tons of coal resource is envisaged, of which 123 billion tonnes are in proved category. These coals are spread over 602 coal blocks in 9 major coalfields.

Please refer to Table 1 for the disposition.

Table 1 - Coal Block Disposition

S.No. Coalfields Total
No. of Area Geological
Blocks (ha) Reserve (MT)
1 Talcher 82 80400 42036
2 lb Valley 49 51600 14362
3 Mand Raigarh 801 118200 20837
4 Sohagpur 110 127550 6943
5 Wardha Valley 113: 82900 6032
6 Singrauli 46 66800 13895
7 North Karanpura 63 60600 11886
8 West Bokaro 1 39 14800 2829
9 Hasdeo-Arand 20 45883 4583
Total 602 648733 123403
(Source: Ministry of Coal)

Indian Coal Projects

Ministry of Coal is empowered to allocate coal blocks to coal-based industries of both public and private sectors. By mid 2010, a total of 147 blocks were allocated. A state-wise coal block allocation is captured in Table 2. However, only a few of the allocated coal blocks have gone into production.

Table 2 - Coal Block Allocation

States Number of coal blocks allocated
2006 2007 2008 2009 2010 (Up to June, 2010)
Andhra Pradesh - 03 - - -
Chhattisgarh 13 09 06 03 -
Jharkhand 19 12 09 03 -
Madhya Pradesh 09 11 04 01 -
Maharashtra 02 05 02 03 -
Orissa 11 06 03 02 01
West Bengal 02 05 - 04 -
(Source: Ministry of Coal)

As on date, out of the allocated 147 blocks only 26 have started production.

Coal Project Clearances

While steel is required to reinforce the sinews of Indian industry, power is required to energise it. The key raw material in both the industries is coal. Unfortunately, India is reeling under steel and power shortage.

The general refrain amongst the project proponents of both public and private sectors of steel and power industry is clearances which are kept on hold, stretched or delayed.

Mining Regulations

A slew of thirty five statutory acts, rules and regulations listed in Table 3 are in place for development and mining in our country. A set of regulations need to be complied with depending upon the mineral venture undertaken by any sector.

Table 3 - Acts, Rules, Regulations

S.No. Acts, Rules, Regulations Year of Promulgation
1 The Mines and Minerals (Development and Regulation) Act 1957
2 Mineral concession Rules 1960
3 Coking Coal Mines (Nationalisation) Act 1972
4 The Coal Mines (Taking Over of Management) Act 1973 (No. 15 of 1973)
5 Coal Mines (Nationalisation) Act 1973
6 Coal Mines (Nationalisation) Amendment Act 1993
7 The Coal Mines (Conservation and Development) Act 1974
8 The Coal Bearing Area (Acquisition and Development) Act 1957
9 Colliery Control Order 2000
10 The Land Acquisition Act 1984
11 The Factories Act 1948
12 The Mines Act 1952
13 The Mines Rules 1955
14 Coal Mines Regulations 1957
15 Explosives Act 1884
16 Explosives Rules 1983
17 The Public Premises (Eviction of Unauthorised Occupants) Act 1971
18 The Coking Coal Mines (Emergency Provisions) Act 1971
19 The Indian Forest Act 1927
20 The Water (Prevention and Control of Pollution) Act 1974
21 Water Pollution (Procedure for Transaction) of Business Rules 1975
22 The Water Prevention and Control of Pollution Cess Act 1977
23 Water Prevention and Control of Pollution Cess Rules 1978
24 The Air (Prevention) and Control of Pollution Act 1981
25 Environment (Protection) Act 1986
26 Environment (Protection) Rules 1986
27 The Hazardous Wastes (Management & Handling Rules) 1989
28 Indian Electricity Act 1910
29 Indian Electricity Rules 1956
30 Workmen's Compensation Act 1923
31 Workmen's Compensation Rules 1924
32 Atomic Energy Act 1962
33 Mineral Conservation and Development Rules 1988
34 Metalliferous Mines Regulation 1961
35 Forest Conservation Act 1980

Approving Ministries

A host of ministries and other key organisations play an important role in approval or grant of project clearances. The key ones are listed as under.

  • The Geological Survey of India, Mineral Exploration Corporation and CMPDIL map India's coal resources and are under the jurisdiction of the Ministry of Mines.
  • The Coal Ministry.
  • Ministry of Power recommends coal linkages to power projects and coal block allocations for captive mining.
  • Ministry of Steel plays an analogous role for the steel sector.
  • The Ministry of Environment and Forests regulates environmental impacts of mining and provides clearances for mining in forest areas.
  • The Ministry of Mines facilitates coal resource exploration.
  • The Directorate General of Mines Safety, in the Ministry of Labour, helps protect occupational health and safety of mine workers in India through legislation, examinations, inspections and investigations.

Regulations and Ministries: A Circular Relay Race

The clearances from the ministries and the compliances to the inventory of regulations in Table 3 are necessary to commence mining in our country. The multi ministry and multi statutes require extensive time and resources to get through. The lingering and long drawn process saps the sectorial investor's zeal and energy, which, in turn, may lead to lethargy and subsequent delay in sustained follow up. The project then may get delayed in terms of time line and is fraught with the risk of cancellation.

However, once developers are through with clearances, next up is the implementation and record keeping part which in itself is extremely exhaustive. The sectors need to allocate resources, both human as well as technical, to ensure compliance. The magnitude of activities and associated documentation makes the system perfunctory.

Regulations: Boon or Bane

Although the regulations may be dated, but the basic tenets have ensured scientific mining and a balanced environment as on date or else the results would have been alarming. The regulations serve as a beacon to the mining industry. The community at large stands to benefit from the compliance. These regulations also ensure entry of capable and competent players in mining.

Visible Impact

The development of allocated blocks requires clearances to be in place lest the country and projects therein would resort to coal imports.

The hiatus between demand of Indian Steel and Power sector is being abridged by replenishing the shortfall through the import route. A host of organisations of national calibre have forayed into external options. The following are some to name a few:

  • Coal India Limited (CIL) from South Africa, Indonesia, Mozambique, Zimbabwe Australia, and Russia
  • The Steel Authority of India Limited (SAIL), India's largest steel producer has eyes on overseas coal assets.
  • Gujarat NRE Coke Ltd coking coal mines in Australia
  • Tata Steels venture in Australia, New Zealand, Mozambique, and Indonesia.
  • Tata Powers coal supplies from Australia, Indonesia and South Africa.

How to remove the Achilles heel?

Hold it where it is weak is the adage. Apply the regulations with all propensities. All said and done, a synergy between the sector, the ministries and regulations is the key to ensuring the stakeholders interest.

Way Forward??........ Bell the cat

A lot is said about difficulty in securing clearances. Reams have been used to pen down suggestions. However, a few suggestions are being listed, which, if implemented, will save our national resources both in terms of human and economic and above all, help establish an objective approach and transparency in black diamond industry.

  • Amendment of dated Acts, Rules and Regulations.
  • Simplification of Acts, Rules and Regulations.
  • Adapt IT to Acts, Rules and Regulations.
  • Simplify PL/ML application procedure across the country.
  • Simplify Coal Allotment procedure.
  • Establish Standard Operating Procedures (SOP) for all mining and related activities.
  • Fast Track clearances. Set up One Window Coal Regulatory Authority with representations from Private sector.
  • Adopt a "One mentor-One Project" approach to hand hold new entrants in the coal industry.
  • Open up exploration to private players to work as partners in progress with the Government.
  • Consider a time limit for disposal of applications failing which "deemed approval" process applies.
  • Undertake ongoing exercise of mapping of forest and coal reserves.
  • Make aerial photography a must for all coal/mineral projects
  • All meetings should be attended by representatives from ministries providing clearances to dispel ambiguity.

The coal industry has seen testing times. We need to up the ante and synchronise our objectives and regulations to achieve industrial growth without any slippage. Why to waste our scarce foreign exchange? Time we spent it on exploring the unexplored and ramp up our inventory.

Coal is a fossil not our minds.