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ISBN- 81-7041-863-1
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COAL INDUSTRY
D.K. MITTAL
Coal satisfies 58 per cent of the total commercial energy demand in the country. The entire coal production (except for the captive mines) and 75 per cent of the total commercial demand for coal lies in the public sector.
Coal Production increased from 70 m.t. at the time of nationalization in 1972-73 to a targeted 238 m.t. in 1992-93. The targets were met in terms of quantity alone. The quality suffered. The average ash content of the Indian coal increased from around 25-30 per cent to about 35-40 per cent. Severe shortage of coking coal is obligating their import for steel plants. Greater effort is, therefore, needed for improving production of coking coal, increasing the share of underground mines and expanding coal-washing capacity in the public and the private sectors.
Coal companies in India suffered heavy losses during the seventies and the eighties due to over-manning low productivity, poor technology and unviable prices on account of dominance of price stabilization considerations. Various elements of costs, e.g., depreciation, interest and return on equity was excluded from the cost build up for price fixation. Only since December 1987 the coal prices are regulated on the basis of normative costs recommended by the BICP. A process of averaging of costs is adopted due to vast differences in production costs in underground and opencast mining and those due to depth of mines, capital intensity, technology and terrain etc.
With the commencement of the nineties, the emphasis shifted from price stabilization to commercialization. The CIL launched a number of schemes, such as, 'Cash and Carry Scheme', 'Cost-plus Scheme' and 'Wash and Carry Scheme' for improving liquidity, reducing interest loss and earning higher return on investments. Consequently, the CIL earned a profit of Rs.187 crore in 1991-92 and Rs.225 crore (unaudited) in 1992-93. These and other aspects of the coal industry have been studied in the book with the help of 102 Statistical Tables and appendices pertaining to the world coal reserves and world coal production.
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