'The vision now is to improve the quality of coal'

Anil Swarup, who took over as Union Coal Secretary on November 1, 2014, was sitting on arguably the hottest seat in the country. Coal was the dirty word, because of several  scams. There was acute shortage of coal. Anything that would go wrong with the sector had gone wrong. In a candid interaction with Deccan Herald’s Umesh M Avvannavar, on the sidelines of sixth edition of Mining, Exploration Convention and Trade Show (Mining Mazma 2016), here in Bengaluru recently, the Coal Secretary says, “Fortunately, God has been kind.  I now have time to sit down with you and chat. Two years ago, it would had been difficult.”

What are the prospects of the coal industry in India?

Coal prospects are enormous in India, close to 300 billion tonnes. But the problem till two years ago was despite the potential we had, we were short of coal.

We are still importing, which is however not a big issue. There was an average inventory of four to six days till two years ago. Today, the average inventory has gone beyond 20 days. There is no single power critical or super critical for want of coal. Basically, we have enough coal. We are considering exporting it to Bangladesh. That’s the turnaround taking place in the coal sector, from acute shortage to at least temporary surplus.

Now Coal India (CIL) is not taking any initiative to find buyers for coal. This has come about because there are three major factors that determine availability of coal in the country. One is the availability of land. You must have land to mine coal.  Second, is the environment clearance. Because, without clearance, you cannot mine the coal. Third is your ability to evacuate coal after it is mined. Unless you have evacuation, you’ll not know where to take it. So on these fronts, in the past couple of years, a lot of work has been done. So much so that for 2015-2016, we saw a record growth of 9% over the previous year.

Why only Bangladesh?

Transporting coal is expensive as we can’t go beyond a certain distance. Since Bangladesh is next door, and we have the Eastern Coal Field which adjoins West Bengal, we can easily transport coal to that country. Our coal contains a lot of ash content which is more than 34%, and in some cases 40%. Our coal is not of the required quality that can be transported over long distances.

What is the potential of new areas?

Coal India is aiming at 1 billion tonnes by 2020. Last year, CIL produced 538 million tonnes. Plans are afoot. The fundamental objective is to ensure that whatever coal is required in the country is made available. Obviously, there is no point in mining more coal where it is not required. Good thing in 2015 and this year is that we have been able to supply the demanded coal, and we still have some surplus.

What about theft that has been happening?

We are using technology to prevent theft of coal. All our trucks are GPS-managed. We have a virtual boundary through satellite. When a truck moves out of the virtual boundary, immediately we get a flash. From CIL, we are ensuring that trucks don’t go out anywhere. 

Even in outsourced case, trucks are not allowed to go beyond the boundary. We can track any outsourced truck. Pilferage may be happening. It is difficult to quantify how much. But substantial amount of coal pilferage has been stopped.

Does the coal mafia still exist?

I don’t know what you call mafia. Much of the problem existed because of scarcity of coal. If you look at a mafia system anywhere in the world, it emerges when you restrict supply. The original mafia in the US emerged because of prohibition and shortage. Apart from the direct action which state government should take or would be taking. Obviously, supply of coal is so much, the margin has come down. It becomes unviable. 

So the price in the so-called grey market and the price at which CIL sells the margin is not much. Generally, the price of coal has come down. Production has gone up. Our view is that if they are able to supply sufficiently, this problem will get reduced dramatically. Pilferage may still continue because it is free coal, but diversion to the grey market will come down.

Now, renewable fuels are being used to generate electricity. Do you think the supply of coal will come down?

In India, the per capita consumption of power today is at the level of late 1990s and early 2000s in the US. That being the case, my personal view is that space will be occupied by coal and non-renewable energy, and that is how it should be. The country is very committed to renewable energy. It doesn’t mean that renewable energy will replace coal. There will be more space that is available will get occupied. As a proposition, coal-based power plant or capacity will come down in absolute numbers that will grow because there is so much space.

Which are the major mines?

The major mines are in Chattisgarh and Odisha which contributes around 50% of our coal production. Dhanbad in Jharkand also contributes a fair share.

What is the amount of jobs generated till date?

It is huge, the direct employment of CIL is about 3.4 lakh employees. 

What is your vision?

We should now go in for cleaner variety of coal. We are setting up washeries. Quality of coal should improve. We should try and reduce the ash content, because it damages the environment. Whenever mining is happening, forest cover is restored.