4 th COAL SUMMIT 2012

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

2. INDIAN COAL RESOURCES (Bt) - As on 01.04.2012

3. Coal Resource Availability/ distribution Scenario (As on 01.04.12)

4. ALL INDIA DEMAND / SUPPLY SCENARIO- Past Trend

5. ALL INDIA DEMAND / SUPPLY SCENARIO – Future Projection *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

7. Source-wise Production (Mt) – Past Trend & Programme for 12-13 & XII Plan (Mt) * 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 7

8. COAL PRODUCTION PROGRAMME OF CIL GROUP-WISE BREAK-UP • 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. 8

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 • 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. Forestry Clearance Forests Rights Act 2006

14. Environmental Clearance

15. Evacuation Infrastructure

16. INITIATIVES FROM CIL TO MEET GROWING DEMAND ~ 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. CIL Vision 2020 • 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. Exploration Activities 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.

17. Initiatives continued… • 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 Implementation of Master Plans • 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. Coal Beneficiation • 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. Underground Mining

18. Initiatives continued… • 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. Engagement of Mine Development & Operators (MDO) • 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. Use of Higher Size of Equipment

19. Foreign Acquisitions - Strategy Framework 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)] 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 19

20. Initiatives taken so far – Equity Model 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

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 21

22. CIL Vision 2020, adopted by the Board of Coal India, makes several fundamental suggestions to improve domestic supply

23. Actions being taken by Coal India to enhance domestic supply • Capacity augmentation by 180 MT planned during the 12th 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 12th 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