Coal Production Issues

The government has decided to offer 10 coal mines for auction

India is the third largest coal producer in the world. But it is also its third largest importer.

It will break the 41-year old domination of the state-owned Coal India Limited (CIL) over commercial mining

It will improve supply of the fuel, and its quality

Current regulation restricts commercial operations to CIL — and Singareni Collieries Limited

It is the major reasons for the energy-strapped country not being able to tap the full potential of its coal reserves

Competition Commission of India (CCI) said that monopoly exercised by CIL is “patently unfair”.

It is found that CIL and its subsidiaries is “in contravention of the provisions of Section 4(2)(a)(i) of the Competition Act, 2002, for imposing unfair/discriminatory conditions in fuel supply agreements with power producers”

Indian coal has about 45 per cent ash, much higher than the 25-30 per cent ideally required for the efficient burning of the fuel in thermal power stations

Geological factors are the primary reason for this lacuna

CIL’s overwhelming dominance of commercial mining has made the outfit stingy in investing in technology

Coal washing, for example — that increases the efficiency of coal. Less than 20 per cent of the coal produced by CIL undergoes coal washing.

Thermal power plants also have to reckon with stones in the coal they procure, which adds to their production costs and contributes to the wear and tear of their equipment