1. 4 th COAL SUMMIT 2012 S trategy for Bridging the Gap to meet the future need of Coal Industry in India 20th Nov, 2012 N Kumar Director (Tech) Coal India Limited

2. INDIAN COAL RESOURCES (Bt) - As on 01.04.2012 Type -wiseProvedIndicatedInferredTotal% Coking 17.9313.652.1133.6911.48 Non-Coking 99.62128.4230.28258.3288.00 Tertiary 0.590.100.801.490.52 Total 118.14142.1733.18293.50 Depth -wise 0- 300 91.9271.4610.76174.1459.33 300- 600 11.0458.4216.2685.7229.21 0 – 600 (Jharia coalfield only) 13.710.500.0014.214.84 600 – 1200 1.4711.796.1719.436.62

3. Coal Resource Availability/ distribution Scenario (As on 01.04.12) Total Resource (Bt) 293.50 CIL Command area 66.00 Captive allocation 45.00 Power 28.00 Others 17.00 Others 12.00 Captive (Unallocated) 22.00 104.50 Unblocked

4. ALL INDIA DEMAND / SUPPLY SCENARIO- Past Trend Figs in Mt TY IX Plan TY X Plan XI Plan 01-0206-0707-0808-0909-1010-1111-12 (Act) Demand354474493550598656650 CAGR %2.326.006.52 Demand Materialization 352464504549588593636 Through Ind. Supply331421454490515524537 CAGR %2.154.934.98 Through Import21435059736999 Coking11182221252030 Non-coking10252838484969

5. ALL INDIA DEMAND / SUPPLY SCENARIO – Future Projection Figs in Mt TY XI Plan 11-12 XII PlanXIII Plan 12-13 BE16-17 Proj21-22 Proj Demand650773 *980.501373 CAGR %6.528.576.97 BE/AP 12-13 BAUOPTBAUOPT Through Ind Supply536580715 #795 #9501100 CAGR %4.985.898.165.856.71 Gap192.54265.50185423273 Coking30.00 Non-coking162.54 * Assessed by Planning Commission # Considering CIL’s supply of 556.4 Mt & 615 Mt as mentioned in Working Group Report XII Plan in ‘BAU’ & OPT Scenarios respectively

6. Year-wise/Sector-wise Coal Consumption/Demand-Mt SectorTY X Plan XI PlanXII Plan 06-0707-0808-0909-1010-1111-1212-1316-17 (Actual)TGT/AP 12-13 PROJ Steel35.1739.0037.6641.1436.8142.0852.3067.20 Power (U) 307.92332.40362.08378.30390.09399.09512.00682.08 CAGR %4.325.3211.31 Others120.78132.89149.28167.77166.10194.45208.54231.22 Total463.87504.29549.02587.81593.00635.62772.84980.50 CAGR %5.706.509.06

7. Source-wise Production (Mt) – Past Trend & Programme for 12-13 & XII Plan (Mt) TY of VIII Plan (96-97 TY of IX Plan (01-02) TY of X Plan (06-07) TY XI Plan (11-12) XII Plan (12-13) XII Plan (16-17) (BAU) XII Plan (16-17) (OPT) ProductionActualTGTPROJ CIL250.62279.65360.91435.84464.10556.40615.00 # CAGR % 4.192.225.233.84( 6.48)*5.007.13 Non-CIL38.7048.1469.92103.95110.30158.60 180.00 All India289.32327.79430.83539.79574.40715.00795.00 CAGR %4.442.535.624.61(6.42)* 5.788.05 7 * Growth% over previous year # The production in Optimistic Scenario is available only if the requisite clearances are processed in fast- tracked route and delivered within the specified time schedule. The issues affecting land acquisition, R & R, law & order and evacuation infrastructure in particular will also have to be addressed in a time bound manner

8. 8 COAL PRODUCTION PROGRAMME OF CIL GROUP-WISE BREAK-UP Group11-12 12 - 13 13 - 14 14 - 15 15 - 1616 - 17 Plan Period Growth ActBE Target proposed by Sub. Projection Existing + Completed 224.44 229.31214.56202.35197.26 192.42-32.02 Ongoing Projects 212.40 232.89259.15286.49306.86 325.78113.38 Future Projects 0.00 1.908.2941.9170.38 96.80 TOTAL 435.84464.10482.00530.75574.50615.00178.16 Production from the existing & completed projects shall register a decline in production of around 32 Mt. The likely increase in production from the ongoing projects shall be about 113 Mt The future/ new projects is likely to be 97 Mt during the terminal year of the XII Plan period.

9. ON-GOING PROJECTS 147 Projects & approved schemes are under execution (Ultimate Capacity – about 437 Mty, approved Capital – Rs30,000 Crs) projected to contribute 333 Mt in 16-17. Plan period growth – 115 Mt. Bulk of incremental production to come from 54 projects - incremental production - 190 Mt. Out of these 147 projects required clearances are available in 82 projects, 34 projects are awaiting forestry clearances, 13 projects are awaiting environmental clearances & 18 projects require both the environmental & forestry clearances. About 42 major projects are affected due to delays in Land acquisition. All identified activities of these 54 projects to achieve desired level of production are being monitored stringently at appropriate level.

10. NEW / EXPANSION PROJECTS – XII Plan Envisaged to take up 126 new projects in XII Plan. (58 spill-over from XI Plan + 63 new) PR Cap – 422 mty., Env. Cap Inv – 85,000 Crs 60 projects(PR cap- 214 Mty) to contribute around 93 Mt Projected production - 98 Mt in 16-17. Bulk of projected growth will come from - from coalfields of N.Karanpura, Ib, Talcher & Mand-Raigarh.

11. Based on LOA’s granted by SLC(LT) & other commitments, the future coal balance for CIL is to a large extent (-) ve The envisaged production of CIL is less than the commitments already made The peak deficit of (447 Mt) 96 % is in FY 2013 This necessitates to augment the domestic coal production. Increase in domestic production is very much uncertain and as such requires enhance import facilities The responsibility of CIL will be huge given the New Coal Distribution Policy which envisage total demand of the country to be met by CIL including coal imports, if required.

12. Challenges for Enhancing Domestic Coal Production Performance IndicatorReason for Delay Under the XI Plan, the envisaged land acquisition was > 62 Thousands Ha Against it, during XI Plan, CIL was able to acquire only approx 25,000 Ha, i.e. ~ 40 % of the target Under the XII Plan, envisaged land acquisition is approx 65 Thousands Ha Bulk of land envisaged for acquisition in XI plan was tenancy land However, going ahead the proportion of forest land will increase It is understood that from the present proportion of 30 %, the forest land will increase to 50 % in the future years Forest Land Involvement of multiple state and central government agencies in forest land acquisition leading to inordinate procedural delay Tenancy Land Proper Record of Rights (RoR) not being available with State Governments for identification of ownership of land causes problems in ascertaining the actual ownership of the land. This complicates the R & R process thus delaying the land acquisition. Land Acquisition is the biggest bottleneck in coal mining operations –CIL has faced prolonged delays in many of its projects leading to loss of production –Even after acquisition, possession of land presents another problem to the company

13. Forests Rights Act 2006 Performance IndicatorReason for Delay Average time for Stage I Forestry clearance is about 4 years Average time for Stage II clearance is about 3 years Thus the total time for Forestry Clearance is 7 years against the normative time of 2-3 years. Delay in registration of applications for delay in furnishing NoC from the Collector for diversion of revenue forest land for non- forestry purpose. Proposals have to pass through various channels of State & Central Govts. There is overlapping of land records being maintained by the Revenue Deptt & the Forest Deptt. The reconciliation is time taking. Certificate under Forest Rights Act -2006 is mandatory for obtaining forestry clearance. Any delay in issue of NoC under the said Act has cascading effect on issue of forestry clearance. Certificate under Forest Rights Act -2006 has been made mandatory even for renewal cases of Forest Clearances also. As no specific guideline/procedure/proforma for obtaining Gramsabha resolution and NoC from the District Magistrate is available, majority of forestry clearance cases are held up. Forestry Clearance

14. Performance IndicatorReason for Delay For every coal project it is mandatory. It takes long time than statute  Considerable time is taken in obtaining ‘Consent to Establish’ and ‘Consent to Operate’ certificates.  Delay occurs in receipt of TOR.  Delay in holding the public consultation process. EIA 2006 indicates a time limit of 45 days for completion of the “Public Consultation Process” which is not fulfilled.  Environment Clearance is normally granted up-to a certain peak capacity (projected peak production) for a specific project. Capacity enhancement of any project requires further environment clearance for the enhanced capacity from MoEF, which is also time consuming. Environmental Clearance

15. Performance IndicatorReason for Delay In last 7 years coal stock was increased by approx 48 Mt due to non- availability of, Sufficient railway rakes Matching feeder lines as well as loading facilities in IB Valley, Korba & N.Karanpura fields Bulk of future production will come from 5 coal fields of CIL and it is imperative that continuous investment is made in logistics infrastructure The progress of new railway line projects related to coal evacuation have not achieved the desired progress in the last few years (Tori-Shivpur- Hazaribagh, Angul-Kalinga, Gopalpur-Manoharpur, Non-availability of sufficient number of railway rakes. This has improved in 2012-13 because of monitoring at the level of Chairman, Railway Board. CCL, MCL & BCCL are particularly facing the problems in dispatch of coal and increasing coal inventory levels Evacuation Infrastructure

16. Identification of Projects 58 coal projects of XI Plan spilled over to XII Plan and about 68 new projects tentatively identified for XII Plan period. CIL Vision 2020 ~ CIL, has formulated Vision 2020 document in view of the increasing requirements on the organization. ~ Six Strategic Themes has been identified, namely, Scalability of Production, Operational Excellence, Employer of Choice, Sustainability, Customer Orientation and Diversification. ~ Multiple initiatives have been discussed under each strategic theme to bring about the transformational change in the organization. Exploration Activities CIL is taking initiatives to enhance annual drilling capacity to 0.70 mn meters by FY2013 from 0.498 mn meters achieved in FY2012 The company has intends to achieve conversion of inferred and indicated to proved reserves 3 times the historical performance. CIL is also undertaking systematic exploration to arrive at reliable estimate of coal reserves and application of information technology to create geo database. INITIATIVES FROM CIL TO MEET GROWING DEMAND

17. Initiatives continued… Implementation of Master Plans CIL is actively working various control measures currently available for controlling underground mine fire (in Jharia and Raniganj) delineated in Master Plans. Implementation of Master Plan towards fire control, surface stabilization, rehabilitation with an estimated capital out lay to the tune of Rs.7112.11 crores, in turn CIL may able to recover locked coal to the tune of 1453 Mt to the possible extent. At the time of Nationalisation, no of fires were 70. Affected surface area was 17.32 Km². After taking proper mitigation measures, the affected area reduced to 8.90 Km² Coal Beneficiation As on date, CIL is operating 17 washeries with cumulative throughput capacity of 39.04 Mty. CIL is going to set up another 20 integrated coal washaries with total capacity of 111.10 Mty to supply washed metallurgical as well as thermal coal to consumers. This will not only save transportation cost of high amount of ash contained in Indian coal but also able to supply coal with much higher calorific value vis-a-vis higher fixed carbon contained in steel and power sectors. Underground Mining CIL has turned its focus back on UG Mining for sustainable development. It has identified a number of UG Greenfield properties. Envisaged to enhance production of about 55 Mt in 16-17 from existing level of 40 Mt.

18. Initiatives continued… Engagement of Mine Development & Operators (MDO) MoC has decided to tentatively assign 119 coal blocks to CIL and requested for submitting a detailed time frame in which these blocks would be brought into production. CIL has seriously thought of starting mining in the above blocks on priority basis by engaging Mine Development & Operators (MDOs). Subsidiaries of CIL have proposed 27 Mines/Blocks of total capacity of about 136.50 Mt for operation under MDO/PPP concept. Out of 27 Mines/Blocks, 12 are underground having about 14.5 Mt capacity and 15 are opencast having capacity of about 122 Mt. Use of Higher Size of Equipment Higher size of Heavy Equipment Mining Machinery being commissioned in OC mines. Surface Miners in OC mines & Continuous Miner in UG mines are being commissioned wherever feasible to avoid drilling and blasting.

19. BUSINESS MODEL: Equity Model – Stake with off take contract in brown field assets – 100% or majority stake in green field assets Off-take Model : – Long term contract essentially with coal miners – Short term contract TARGET PRODUCTS & DESTINATIONS: Mozambique – Coking & thermal from own assets Indonesia - Thermal coal [ > 4000 kcal/kg (ARB )] South Africa- Thermal Coal [ > 5500 kcal/kg(ARB)] USA- Thermal Coal [ > 6000 kcal/kg(ARB)] Australia - Thermal Coal [ > 5500 kcal/kg(ARB)] 19 Foreign Acquisitions - Strategy Framework

20. Mozambique:  2 coal blocks acquired in Mozambique, Area - 224 sq km  Location – Moatize district, Tete Province  Wholly owned subsidiary Coal India Africana Limitada registered in Mozambique, Office opened in Tete in March 2012  Team of senior officers posted  Drilling started 20 Initiatives taken so far – Equity Model

21. 21 Initiatives taken so far – Equity Model South Africa:  MoU signed with Provincial Govt. of Limpopo in 2011  Strategic alliance for exploration and development of coal assets in Limpopo Province  Potential zones for coal resources identified

22. CIL Vision 2020, adopted by the Board of Coal India, makes several fundamental suggestions to improve domestic supply RecommendationsKey actions Establishment of a Project Management Office (PMO) for large future projects Increased delegation of power of a Multi-Tier Org spanning CIL level, Subsidiary HQ and Project Specialized training (PMP certifications etc.) and full-staffing of all roles Modern way of working Development of Contractor Market Attractive contract terms to encourage private sector participation, esp. those with superior technologies and good practices Road-shows to attract potential partners (esp. in UG mining, exploration & technical services etc.) Investment in Logistics Investment in last-mile connectivity Improvement of pit-head to siding infrastructure Creation of logistics as a separate function to build expertise Formation of suitable JVs to execute projects Continuous Improvement Program Improvements linked to incentives to increase motivation for participation Large scale up-gradation of employee-skills to detect and report inefficiencies Strong knowledge management Other Actions Suggested Flexibility and independence in setting R&R policies and land compensation More thrust on mechanization and commercialization of R&D partnerships Focus on staffing of key roles (e.g. in E&F and L&R departments) Thrust on exploration etc.

23. Actions being taken by Coal India to enhance domestic supply Capacity augmentation by 180 MT planned during the 12 th Plan period Investment of Rs. 7500 Crores in Logistics over the next plan period Road show for partners in UG Mining New flexible R&R policy has been framed Focus has been given on increased capacity of washed coal - tenders for 4 washeries (22.5 MT) out of 20 planned during the 12 th plan completed Special focus is being given to recruitment and back-fill of open positions in critical departments CIL is engaged with Governments to a greater degree to expedite various clearances (PMO intervention sought for 178 clearances) Pooling of coal prices may pave the way for linkage rationalization

24. THANK YOU