A Brief History of Coal Mining and Coal Deposits in India 44 CHAPTER 3 A BRIEF HISTORY OF COAL MINING AND COAL DEPOSITS IN INDIA Introduction In the previous Chapter, we have described the important studies conducted in our research field that we have extensively surveyed and examined for the purpose of our study. We have also pointed out the research gap to justify our investigation. Now the present Chapter provides a fascinating description of the historical background of coal industry in India, nationalization of coalmines and formation of Coal India Limited and its subsidiaries including Eastern Coalfields Limited. We have also portrayed here Indian and Global coal scenario and the position of our country in the international field with regard to coal deposits and future prospect of this vital energy source. The whole matter is presented in the following sections: 3.1 A Brief History of Coal Mining in India Historical records show that even in ancient times people used metals and alloys for their daily living. The Asoka-Pillar, the Pillar in the Kutub-Minar and development of the Cannons in the early historical period provide ample proofs of the use of molten iron in ancient times and medieval India. At that time coal was used for melting metals. The ruins of smithy furnaces and slack hips close to the coal deposits in the Eastern regions indicate that the coal was used in the metallurgical processing even as early as 2000 years ago. Ancient scriptures suggest that the name of the Damodar, the main river in the Eastern India, on the banks of which the reserve of coal is abundant has its origin in the phrase “ Dam- Udare- Jahar”, i.e. fire in the belly. The names of some villages like Angarpathra (pot of burnt coal), Kalipahari (Black Mountain) near Asansol in the Eastern region suggest the existence of coal deposits in these areas and confirm previous knowledge of the people of these areas in the presence of underground coal deposits long before the mining operations began. Thus, there are evidences that coal was known as fuel resource in India. However, there was no record or documentation regarding the coal industry until the middle of the18 th century. Some records show that as far back as in 1774-75 shallow mines were used to be operated first in Raniganj fields of West Bengal, which is considered the birthplace of coal mining in the Country. 1
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A Brief History of Coal Mining and Coal Deposits in India
44
CHAPTER 3
A BRIEF HISTORY OF COAL MINING AND COAL DEPOSITS IN
INDIA
Introduction
In the previous Chapter, we have described the important studies conducted in our
research field that we have extensively surveyed and examined for the purpose of our
study. We have also pointed out the research gap to justify our investigation. Now the
present Chapter provides a fascinating description of the historical background of coal
industry in India, nationalization of coalmines and formation of Coal India Limited and
its subsidiaries including Eastern Coalfields Limited. We have also portrayed here Indian
and Global coal scenario and the position of our country in the international field with
regard to coal deposits and future prospect of this vital energy source. The whole matter is
presented in the following sections:
3.1 A Brief History of Coal Mining in India
Historical records show that even in ancient times people used metals and alloys for their
daily living. The Asoka-Pillar, the Pillar in the Kutub-Minar and development of the
Cannons in the early historical period provide ample proofs of the use of molten iron in
ancient times and medieval India. At that time coal was used for melting metals. The
ruins of smithy furnaces and slack hips close to the coal deposits in the Eastern regions
indicate that the coal was used in the metallurgical processing even as early as 2000 years
ago. Ancient scriptures suggest that the name of the Damodar, the main river in the
Eastern India, on the banks of which the reserve of coal is abundant has its origin in the
phrase “Dam-Udare-Jahar”, i.e. fire in the belly. The names of some villages like
Angarpathra (pot of burnt coal), Kalipahari (Black Mountain) near Asansol in the Eastern
region suggest the existence of coal deposits in these areas and confirm previous
knowledge of the people of these areas in the presence of underground coal deposits long
before the mining operations began. Thus, there are evidences that coal was known as
fuel resource in India. However, there was no record or documentation regarding the coal
industry until the middle of the18th century. Some records show that as far back as in
1774-75 shallow mines were used to be operated first in Raniganj fields of West Bengal,
which is considered the birthplace of coal mining in the Country. 1
A Brief History of Coal Mining and Coal Deposits in India
45
A systematic survey of coalmines was conducted in 1845-46 and again in 1860, when it
was found that there were about fifty collieries in the area producing 28,200 tonnes of
coal. At first, coal mining was limited to the Raniganj Coalfields but during the later part
of the 19th Century, exploration started elsewhere in the country. At the beginning of the
20th century, coal production in India reached 6 million tonnes. During the First World
War period, increased demand for coal gave impetus to the development of coal industry.
In 1919, the production of coal rose to 21 million tonnes. In subsequent years, the
industry suffered a setback due to great depression just after the World War 1. 2
The years from 1937 to 1942 constituted another important period, when international
demand for coal steadily rose. Meanwhile, quite a number of quarries and pits were
operated in the Raniganj, Orissa, and Madhya Pradesh Coalfields. The Coal Mining
Committee set up by the Imperial Govt., submitted their report in 1936 on the measures
for securing safety and preventing waste of available coal. In the year 1945, the Singareni
Collieries Company Limited (SCCL) was formed as the first Government owned Coal
Company in the country. In that year, Government of Nizam of Hyderabad bought all the
shares of the company and brought the company under India Trust Fund of the Niza m
Government. The said company actually started production in 1889 at Yellandu area of
present Andhra Pradesh and raised 60,000 tonnes of coal in that year. 3
In 1947, India achieved its independence. Subsequently Five Year Plans were launched
with ambitious targets of coal production. Realizing the importance of coal to the
development of India, our motherland, National Coal Development Corporation (NCDC)
was set up in 1956. Most collieries belonging to the Indian Railways were transferred to
the NCDC to bring about rationalization in coal industry. NCDC brought a major change
in the lives of the coal miners and their standard of living. In 1960, coal industry suffered
a setback in as much as demand could not consume supply. This was due to slippages in
achieving targets by steel, power and other industries. During the sixties, the coal industry
passed through a period of cheap availability of oil. The situation, however, took a radical
turn in the seventies due to spiraling up of oil prices resulting in hike in coal demand. The
Central Government took the decision to bring coalmines under the State Control. This
was the last phase of coal industry in the hands of the private owners. It is important to
note that at that time the private owners were producing nearly 75 percent of the total coal
A Brief History of Coal Mining and Coal Deposits in India
46
production. There was a complete anarchy and chaos in the production and distribution of
coal in spite of increase in demand for coal.
Considering the above facts and for proper safety and security of the miners, conservation
of coal, and systematic mining to meet increasing demand of coal especially from Iron
and Steel companies and power (thermal) companies, the Government of India, on
October 16, 1971, promulgated the Coking Coal Mines (Emergency Provisions) Act,
1971. Thereafter, Government of India took over the management of all 226 coking
coalmines except captive mines of IISCO, TISCO and DVC, subsequently nationalized
them on May 1, 1972, and brought under the control of newly formed Bharat Coking
Coal Limited (BCCL) to look after the coking coalmines and for streamlining its
production. Consequently, the private owners of non-coking coalmines stopped further
investment and started violating the safety laws and underpaying workers for short-term
gain, as they were afraid of further nationalization of non-coking coal mines very soon.
Thus, keeping all these factors in consideration Government took over the management of
all 711 non-coking coalmines of the country, then operating, on January 30, 1973 and
subsequently nationalized them on May 1, 1973 and thus a new era began. In order to
provide for a higher growth in coal sector to meet the growing energy needs of the
country, the Government nationalized coalmines by enacting through the Parliament the
Coal Mines Nationalization Act in 1973. The section III of the Act says, “No person,
other than the Central Government or a Government Company or a Corporation owned,
managed or controlled by the Central Government shall carry on coal mining operation in
India.” Thereafter, pursuant to the nationalization of coalmines, all non-coking coalmines
were brought under ‘Coal Mines Authority Limited (CMAL)’, which was incorporated as
a government company under the Companies Act 1956, on June 14, 1973, having three
divisions, Eastern Division, Western Division and Central Division. The CMAL was then
under the administrative control of the Department of Coal, Ministry of Energy,
Government of India.
On November 1, 1975, the Department of Coal, Ministry of Energy, and Government of
India incorporated the present ‘Coal India Limited (CIL)’ as a holding company. The
objective was to integrate and streamline the structural set up and to bring both coking
and non-coking coalmines in one controlling unit that was to be responsible for the entire
coal mining sectors owned and controlled by the Central Government. Then BCCL and
A Brief History of Coal Mining and Coal Deposits in India
47
all the three divisions of earlier CMAL were incorporated as Subsidiary companies of
CIL. Eastern Division of CMAL was converted into Eastern Coalfields Limited (ECL),
Western Division into Western Coalfields Limited (WCL) and Central Division into
Central Coalfields Limited (CCL). With that, one more subsidiary company called
Central Mine Planning and Design Institute Limited (CMPDIL) was incorporated for
planning, design and engineering consultancy services of the coalmines. Again, for the
better control of the mining operations and for enhancing production, few mines were
reorganized on January 1, 1986 and two new subsidiaries came into sight, one from WCL
called South Eastern Coalfields Limited (SECL) and another from CCL named as
Northern Coalfields Limited (NCL). Further reorganization took place on April 1992 and
again one more subsidiary came into existence from SECL named as Mahanadi
Coalfields Limited (MCL).This way, eight subsidiaries of Coal India Limited came into
existence. 4
3.2 The Chronological Sequence of Restructuring of Coal Industry in India
The Chronological sequence of restructuring of coal industry in India is presented in
Figure 3.1 in the next page showing the position of the present Coal India Limited (CIL),
the main coal producing public sector company in India and all the subsidiaries including
Eastern Coalfields Limited (ECL), the subsidiary selected for our research study. 5 Figure
3.1 shows that there are certain mines, which are beyond the control of CIL. These are:
1) Captive coking coal mines of Tata Iron & Steel Company Limited (TISCO),
2) Captive coking coal mines of Indian Iron & Steel Company Limited (IISCO),
3) Captive Non-coking coal mines of Damodar Valley Corporation (DVC),
4) Non-coking coalmines of Singareni Collieries Company Limited (SCCL), jointly
owned by Andhra Pradesh Government and Government of India with equity sharing
in the ratio of 51:49. 6
These are sequentially shown in Figure 3.1 in the next page and necessary explanations
are given after presentation of the Figure.
A Brief History of Coal Mining and Coal Deposits in India
48
Chronological Sequence of Restructuring of Coal Industry in India
Singareni Collieries Company
Ltd. (SCCL)
Non-Coking Coal.
1945, SCCL
Private Sector Mines.
Coking Coal.
TISCO /
IISCO
May, 1972 Coking
Coalmines Nationalized
Bharat Coking Coal Ltd. (BCCL)
Non-Coking Coal.
Captive Mines of
DVC.
May, 1973 Non-Coking Coalmines
Nationalized
State Railways Collieries.
National Coal Develoupment Corporation
(NCDC) 1956.
Coal Mines Authority
Ltd. (CMAL)
November, 1975, Formation of Coal India Limited as Holding Company
North Eastern Coalfields (NEC)
ECL, BCCL, CCL, WCL, CMPDIL
January 1, 1986 Reorganization
NEC
Dankuni Coal Complex (DCC)
ECL, BCCL, CCL, NCL, WCL, SECL, CMPDIL
April, 1992 Further Reorganization
DCC
NEC
ECL, BCCL, CCL, NCL, WCL, SECL, MCL, CMPDIL
Figure 3.1: Chronological Sequence of Restructuring of Coal Industry in India
Source: Glimpses of Coal India (2006), CIL, Kolkata
A Brief History of Coal Mining and Coal Deposits in India
49
Figure 3.1 exhibits that the CIL, at present, has eight Indian Subsidiaries as discussed
afterwards. It has another subsidiary in Africa as is mentioned below. Out of these, eight
subsidiaries are producing companies whereas CMPDIL is an engineering, design and
exploration company for preparing perspective plans, rendering consultancy services and
undertaking exploration and drilling work for establishing coal reserves in the country.
CIL and its Indian subsidiaries are incorporated under the Companies Act, 1956 and are
wholly owned by the Central Government. The coal mines of Assam and its neighboring
areas are controlled directly by CIL under ‘North Eastern Coalfields’ (NEC), a small coal
producing unit operating in Margherita, Assam and ‘Dankuni Coal Complex’ (DCC) is a
low temperature carbonization plant in India leased out by CIL to SECL. The list of all