Coal India

History

Coal mining in Government sector had started in India in the year 1956. Until then, it was totally under the private sector.

In September 1956, Government of India established its own coal company National Coal Development Corporation (NCDC). Collieries run by the Railways formed the nucleus of NCDC. This was to fulfill the fast growing energy requirements in the country to support rapid industrialization taking place through 5-year Plans of the Government. In the same year, Singareni Colliery Company, which was operating in Andhra Pradesh since 1920, was also brought under government control when the Central Government and Andhra Pradesh Government acquired its 45% and 55% shares respectively.

In 1971, the Government of India nationalized all the 214 coking-coal mines and 12 coke-ovens running in the private setor, excluding those held by TISCO and IISCO for their captive use. On 1st Jan 1972, a new Government company Bharat Coking Coal Limited (BCCL) was formed to take control of these nationalized mines and coke-ovens. Next year on 30th January 1973, all the remaining 711 non-coking coalmines of the country in private sector were also nationalized. 184 of these mines were handed over to BCCL, and remaining 527 were handed over to a newly opened department Coal Mines Authority. 4 months later on 14th June 1973, this department was converted into a separate Government company CMAL. NCDC, earlier formed in 1957, was merged with CMAL, and 45% share-holding of Central Government in Singareni Collieries Company Ltd was also handed over to CMAL. CMAL started functioning with its 4 divisions, viz, Eastern Coalfields, Central Coalfields, Western Coalfields, and Central Mine Planning & Design Institute.

By 1973, all coking coalmines were under BCCL, which was functioning as a subsidiary of Steel Authority of India Ltd (SAIL) under Department of Steel of the Ministry of Steel and Mines; and all non-coking coalmines were under CMAL, which was under Department of Mines of the Ministry of Steel and Mines. For better control, both BCCL and CMAL were brought on 11th October 1974 under the Department of Coal (now an independent Ministry) of the newly formed Ministry of Energy.

On 1st November 1975, a new public-sector company Coal India Limited (CIL) was formed to enable better organizational and operational efficiency in coal sector. All the 4 Divisions of CMAL were given the company status, and were brought under CIL along with BCCL. 45% share-holding of the CMAL in Singareni Collieries Company was also transferred to CIL, and CMAL was closed.

Thus, CIL started functioning in 1975 with 5 subsidiary companies under it. These were Bharat Coking Coal Limited (BCCL), Eastern Coalfields Limited (ECL), Central Coalfields Limited (CCL), Western Coalfields Limited (WCL), and Central Mine Planning & Design Institute Limited (CMPDIL). In due course of time, 3 more companies were formed under CIL by carving out certain areas of CCL and WCL. These were Northern Coalfields Limited (NCL), South-eastern Coalfields Limited (SECL), and Mahanadi Coalfields Limited (MCL).

Pursuant to the Fuel Policy of 1974, CIL also started the construction of India's First Low Temperature Carbonisation Plant at Dankuni in the late 1970s. It was renamed as Dankuni Coal Complex, and is one of the best operational plant of this kind in the World.

Government of India held 100% equity of CIL from 1975 till 2010.

Initial Public Offer (IPO)

In October 2010, Government of India offered 10% of the equity shares of CIL (631.6 million equity shares) to public for sale at an offer price of ₹245 (US$3.60) per share (at face value of INR 10 per share). The IPO got over-subscribed by 14.17 times. Against an IPO issue size of ₹155 billion (equivalent to ₹240 billion or US$3.6 billion in 2016) it received bids for ₹2,400 billion (equivalent to ₹3.8 trillion or US$56 billion in 2016) making it the second highest collections in any IPO in India. On the first day of its listing on the stock market, its shares soared 40% higher than IPO price. With the listing, CIL become the fourth most valued company on the Indian stock exchanges with a market value of ₹2.16 trillion (equivalent to ₹3.4 trillion or US$50 billion in 2016). CIL was included in the 30-member BSE SENSEX on 8 August 2011.

On 30 January 2015, in an Offer For Sale (OFS), Government of India sold a further 10% stake in CIL. Priced at ₹358 (US$5.30) per share, the sale fetched the government ₹225.5763 billion (equivalent to ₹240 billion or US$3.54 billion in 2016), making it the largest ever equity offering in the Indian share market.

Operations

CIL is the largest coal producing company in the world. It produced 536.51 MT (million tonne) coal during FY2015-16. Coal India operates through 81 mining areas in eight states in India. As on 1 April 2015, it has 430 coal mines out of which 175 are open cast, 227 are underground and 28 are mixed mines. Production from open cast mines during 2014-15 was 92.91% of total production of 494.24 MT. Underground mines contributed to 7.09% of production. CIL further operates 15 coal washeries, out of which 12 are for coking coal and 3 are for non-coking coal with 23.30 MTY and 13.50 MTY capacities respectively. It also manages 200 other establishments like workshops, hospitals, training institutes, mine-rescue setups, etc.

Subsidiaries

Coal India Limited (CIL) produces coal through seven of its wholly owned subsidiaries. These are Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Western Coalfields Limited (WCL), South-Eastern Coalfields Limited (SECL), Northern Coalfield Limited (NCL), and Mahanadi Coalfields Limited (MCL). Its 8th wholly owned subsidiary Central Mine Planning & Design Institute Limited (CMPDIL) provides exploration, planning and technical support to all the 7 production subsidiaries. CMPDIL also provides consulting services to third-party market clients in the field of exploration, mining, allied engineering & testing, management-systems, training, etc.

CIL also has a wholly owned subsidiary in Mozambique, Coal India Africana Limitada (CIAL) for pursuing coal mining opportunities in that country.

The details of number of employees, revenue for FY2012-13 and production of coal is given in the table below:

Joint Ventures: CIL has two joint ventures:

1. International Coal Ventures Private Limited (ICVPL) was formed in 2009 for acquisition of coking coal properties outside India. CIL holds  ²⁄₇^th share in paid up capital of ICVPL pagal
2. CIL-NTPC Urja Pvt. Limited is a 50:50 JV between CIL and NTPC, formed in April 2010 for acquisition of coal blocks in India and abroad.

Listing and Shareholding

Listing: CIL's equity shares are listed on Bombay Stock Exchange where it is a constituent of the BSE SENSEX index,Scripwise Weightages in S&P BSE SENSEX SE India 31 Aug 2013 and the National Stock Exchange of India where it is a constituent of the S&P CNX Nifty. Download List of CNX Nifty stocks (.csv) NSE India |31 Aug 2013

Shareholding: On 30 January 2015, 79.65% of the equity shares of the company were owned by the Government of India and the remaining 20.35% were owned by others. On 30 January 2015, in an Offer For Sale (OFS), Government of India sold a further 10% stake in CIL. Priced at INR 358 per share, the sale fetched the government INR 225.5763 billion, making it the largest ever equity offering in the Indian share market. On 18 November 2015, Government of India approved another 10% stake sale in CIL.

Employees

Coal India had 333,097 employees as on 31 March 2015, out of which 314,259 were Non-Executives and 18,838 were Executives.It spent Rs. 298.74 billion on Employee benefits which accounted for 50.54% of the total expenditure incurred during the FY 2014–15.

Awards and recognitions

Green Initiatives

Green initiatives: The company planted 1.57 million saplings during 2014-15. In its Annual Report for 2014-15, it informed that it has planted around 82 million trees over an area of around 33700 Ha.

Criticism

Operating 239 mines without environment clearance: In September 2011, CAG criticised CIL for operating 239 mines in seven coal producing subsidiaries, which existed prior to 1994, without environmental clearance. These mines included 48 open-cast, 170 underground and 21 combined mines. In its report, the CAG also pointed out that of the 18 sample open-cast and eight underground mines, ten mines had undertaken capacity expansion without environmental clearances. The company, in its reply, said that applications for clearances to the projects have already been submitted to the Ministry of Environment and Forests.
Coal mines near Tiger Preserves: In India, some coal mines are located near/below the tiger preserves. Mining or construction of administrative offices in/near these preserves disturbs the wildlife. Hence environmental organisations like Greenpeace have been opposing mining in these areas. Around 50% of the energy requirements of India are met by coal. Hence the protection of wildlife is sometimes overlooked due to this fact. In its argument the CIL said that in many cases it only does underground mining which does not hurts the forests above.
Accidents during mining: The company is its Annual Report for FY 2012-13 reported lowest ever figures of average 66 deaths and 251 serious accidents per year for the period 2010-2012 indicating that safety at workplace is improving over the years. Critics claim that the safety practices in most mines are inadequate, which is causing so many casualties. It is also claimed that many accidents and deaths are not recorded and hence are not part of 'official figures'.