Equipment utilisation by Coal India Limited still below best global practices: ex-CIL CMD

The equipment utilisation by world's largest coal producer Coal India Limited (CIL) is still below the global best and the company needs to adopt the best equipment utilisation practices from across the globe to ensure best-in-class mining, said Partha Bhattacharyya, former chairman and managing director, CIL, here on Wednesday.

"Equipment utilisation by CIL is still not at the level of global best. It needs to adopt best equipment utilisation practices from across the globe for best-in-class mining," said Bhattacharyya, giving instances of uses of dumper, shovel and other equipments by CIL.

He was speaking at a round-table panel discussion on 'Coal de-allocation, impact on natural resource and end-use industry, and the way forward' organised by Confederation of Indian Industry (CII) and Adani Institute of Infrastructure Management in Ahmedabad.

He also said that underground mining in India was still at a very nascent stage and its contribution to overall coal production has gone down substantially in the last 40 years.

"Underground mining in India is still at a very nascent stage. The contribution of underground mining has gone down in the last 40 years and currently is just eight per cent. It should at least be at par with open cast mining, which currently contributes 92 per cent of mining. The proportion of underground mining to open cast mining should be 25:75," Bhattacharyya stated, adding that latest technology needs to be identified and adopted for underground mining. He also said that the fundamental solution to the current situation of importing coal should be addressing how the shortage can be turned into abundance.

The Supreme Court's judgment cancelling 214 coal blocks of the 218 coal blocks allocated in 1993, Bhattacharyya stated, is a stern message 'if you are allocating natural resources in a discretionary measure without transparency, you are going to get into trouble'.

Rakesh Arora, managing director and head (research), Macquarie Capital Securities (India) Pvt Ltd, said, "The judgment is a good start, but still there is a long way to go. To attract investments, much more needs to be done. Government will have to come out a stable policy on royalty, taxes, among others. International companies are still not making a beeline to India. We need to allow large international players to mine blocks in India to make mining competitive."

The apex court judgment earlier this year had raised questions about investments made in these cancelled coal blocks and the bank loans extended to their developers.

Bhattacharyya also suggested that the second round of coal block auctions, which will account for 130 blocks, should be merged into large blocks of 10 to 15 before being opened for commercial mining. The first phase of bidding for 74 coal blocks is expected to take place in January 2015. The new winners of these 74 blocks will be allowed to swap the coal produced from these blocks among themselves to achieve operational efficiency.

Coal meets around 52 per cent of primary commercial energy needs in India, the third largest coal producing country in the world after China and USA, against 29 per cent the world over. Around 66 per cent of India's power generation is coal-based.