Indian coal policy best in world: Jindal

Last Updated: Wed, Nov 28, 2012 20:44 hrs

Haryana Member of Parliament (MP) and Chairman of Jindal Steel and Power Limited (JSPL), Naveen Jindal Wednesday said that the coal allocation policy India is following since 1993 is the best policy in the world.

Jindal addressing the 4th India Coal Summit organised by Indian Chamber of Commerce, said that the coal sector has lately been in news for various reasons after the Comptroller and Auditor General (CAG) submitted its report on coal block allocations.

"I do not agree with the figures of CAG at all. It is most unfortunate that this kind of controversy has been created and it has not been in the best interest of the country," he said.

Stressing that the coal allocation policy of India is the best in the world, he said, "Which other country in the world expects you to invest billions of dollars in further value addition of coal."

"The Indian Government has allotted coal blocks to to set up cement, steel and power plants. Countries like the US, Australia, Indonesia and Canada who produce coal do not put a condition that you have to invest downstream."

"All these countries are happy if you mine, and pay royalty and pay income tax."

The MP added, "We should be grateful to Indian government that you cannot sell coal, but set up power, steel and cement plants or feed the existing plants, which means lots of investment generation and a lot more employment."

Jindal noted that the challenges facing the coal sector includes delays in obtaining statutory/governmental clearances including environmental, forest, land acquisition, Rehabilitation & Resettlement (R&R) etc.

Slow progress of development of government dispensed captive blocks to industry, states and Power Supply Unit, (PSUs), lack of development of infrastructure facilities in new coalfields and volatility of imported coal prices and its impact on domestic market.

He suggested some strategies that can propel forward the growth of coal sector like: accelerated Coal Exploration; transparent procedure for allocating coal blocks; blocks allocated to be developed in an agreed, firm stipulated time frame with defined role of the state govts and Central Ministries; redefine environmental policies to facilitate coal production.

All stakeholders including coal companies under guidance of the state government should pursue land acquisition and policy for project affected persons.

Land on lease rather than outright sale also to be an option; resolve issues relating to procurement of coal blocks outside India and take care of Coal import bottlenecks, transport logistics/ ports connectivity and adoption of new efficient technologies for Coal Mining and use of coal.

Full text of the speech by Jindal at the 4th India Coal Summit:

"It is indeed my pleasure to be addressing such an august gathering today on a topic which is related to the energy security of the country.

Coal is the most important and abundantly available fossil fuel in India. It accounts for more than 50% of the country´s total energy needs. In fact, the country´s industrial heritage was built upon indigenous coal.

Commercial energy consumption in India has grown from a level of about 26% to 68% in the last four and a half decades. The current per capita primary energy consumption in India is about 243 kwh/year, which is well below that of developed countries.

According to the 17th Electric Power Survey report, electrical energy demand would likely reach 1,915 TWh by 2021-22 and the peak electric demand will touch 298 GW, thereby doubling from the current level of demand.

Considering the limited reserve potentiality of petroleum and natural gas, eco-conservation restriction on hydro power projects and geo-political perception of nuclear power, coal will continue to occupy centre-stage in India's energy scenario.

India´s coal dependence is borne from the fact that 54% of the total installed electricity generation capacity is coal based and is expected to double by the end of the 12th Five year Plan period (2012-17).

In order to achieve economic growth of 8-9% in terms of GDP, the country´s total coal demand, even after allowing for the slippages that have occurred in the current plan period, has been projected to increase from the present 730 million tons in 2010-11 to 1,353 million tonnes in 2021-22. Of this, about 75% of coal would go to power plants.

The present demand-supply gap is around 85 million tons and it is expected to increase gradually to nearly 140 million tons by 2017, which is being met by importing. However, the new regulations and the price prevailing in the international market are making the use of imported coal uneconomical.

Therefore, we have no alternative but to increase our domestic coal production as well as increase evacuation capacity from the pithead to the consumer plants.

With hard coal reserves around 293 billion tonnes, of which 118 billion tonnes are proved as on 01/04/12, Indian coal offers a unique eco-friendly fuel source as it has low sulphur content.

The lignite reserves stand at a level of around 26 billion tonnes, of which 90% occur in the southern State of Tamil Nadu.

Hard coal deposit spread over 28 major coalfields, are mainly confined to eastern and south central parts of the country. This involves on an average transportation of 600 km from production units to consumer points where Indian Railways play an important part.

However, since the capacity of Railways to transport the huge requirement of coal from pithead to power stations does not match, it is necessary to locate power plants at the pithead to avoid long distance transportation.

The Founder Chairman of JSPL, Shri O. P. Jindalji, envisioned much earlier that material security was imperative for the success of our steel plant at Raigarh.

It was his innovation and initiative that prompted us to utilize locally available coal resource in Raigarh, which was hitherto not considered viable for mining by others. The coal, which was used for captive use for our plant after beneficiation, was very low grade and even ungraded in lower seams.

An innovative approach adopted by JSPL was the establishment of coal washeries for washing this coal and using the washed coal for the steel plant and utilizing the middlings for the power plant with CFBC boilers.

We were the first to commission 4x250 MW mega power plant at Tamnar, Raigarh and construct a 258 km, 400 KV Double Circuit transmission line from the plant to the PGCIL sub-station at Raipur through which power can be transmitted in the Grid.

Thus, the low grade coal which was hitherto considered unviable was utilized for power generation, optimizing the cost of production.

In view of our depleting resource of coking coal in the country, the use of non-coking coal for the iron and steel industry was a revolutionary concept and a number of such plants were established later making India as one of the largest producers of sponge iron in the world.

Thus, at JSPL the policy of the company in terms of forward and backward integration of raw material and optimization of cost gave us a competitive edge over other companies.

The development of Raigarh area into a new hub of steel plants and power has been possible because of the initiative by the JSPL. While developing the area into an industrial estate, we have also not forgotten our corporate social responsibility.

The amount of compensation paid to land oustees, taking care of their alternate income generation, providing them with shelter, electricity and water as well as taking care of their health and education needs has made JSPL a household name in the region.

It has been our endeavour to involve the local people in the growth of the company, not only in Raigarh, but similar attempts have been made at Angul (Odisha) and Patratu (Jharkhand) as well.

Our coal mines at Gare sector in Raigarh were the first captive blocks which came into production inspite of all odds like remote location, negligible infrastructure facilities, difficulty in obtaining environment and other clearances etc.

I am pleased to share that the production from these mines has reached to the rated peak capacity in record time with due consideration to safety and environment. These are the first mines to utilize fly-ash generated from power houses in the mine voids and for large scale brick making.

We are setting up an innovative project of National importance for converting coal to liquid production. We are investing more than Rs 50,000 crore on this project in Odisha to produce 80,000 barrels of diesel/gasoline per day (4.0 MMTPA) using environment-friendly indirect coal liquefaction technology.

I would also like to take this opportunity to appeal to the august gathering that we must all get together and enhance our efforts in further lowering the Greenhouse gas emissions from our industry.

Giving back to the society and starting several initiatives to ensure a strong corporate initiative focusing on the welfare of the local communities will go a long way in building the nation of our dreams.

Thank you! Jai Hind! "

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