1. Business Sectors At a glanceVision & ValuesSustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP

2. Business Sectors At a glanceVision & ValuesSustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP MINING One of India’s largest iron ore mining companies in the non captive private sector. Largest producer of Noble Ferro Alloys Wind power generation

3. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Strategies for Quick Augmentation of Coal Production U. Kumar Advisor (Coal) Essel Mining & Industries Ltd, Aditya Birla Group

4. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Energy availability & Energy security = Key for achieving GDP Growth India’s answer = Coal 55% of Commercial Energy needs and 66% of Power Generation Coal is likely to retain this dominant position in the future

5. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP 60% of the resources available within a depth range of 0-300 mtrs and thus amenable to O/C Mining

6. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP And yet : Economy faltering due to inadequacy of power arising out of Coal shortage. Programme of “Power for all by 2012” is no where near realization. ~ 45,000 MW of power generation capacity (ready for commissioning) will idle for coal shortage.

7. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP TY X Plan XI PlanXII Plan 06-0707-0808-0909-1010-1111-1212-13 16-17 (Act) BE/Ap 2012-13 Proj Demand474493550598656650773*981 Demand Materialisation 464504549588593636 Indigenous Supply 421454490515524537580795# Through Import435059736999193185 Coking182221251930 35 Non-Coking25283849 69163150 Assessed by Planning Commission # Considering CIL's supply of 615 Mt as mentioned in Working Group Report XII Plan as 'optimistic Scenario"

8. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Continuous gap between Demand & Supply and the level of Import is consistently going up. Total import of Coal -Coking as well as Power Grade likely to be ~ 193 mts. And this story goes back to late 1990s when demand started outstripping domestic coal production. Basic reason has been the failure of the Industry on starting new Projects & in many cases on increasing production even from on-going Projects. While Coking Coal Import is understandable since our resources of this type of Coal are rather limited, the import of non-coking coal is something which is difficult to digest. Reasons for the Indian Coal Industry failing to meet the country’s Demand have been analysed on a continuous basis Suggestions made for over coming them but they remain largely unaddressed even now.

9. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Specific reasons : a)Difficulty in getting Forestry Clearance b)Difficulties in Land Acquisition c)Difficulties in Rehabilitation and Resettlement of PAPs. While a system overhaul is the answer for long-term solution, at the Industry level within the existing frame work of regulatory regime, following should be looked at for quick augmentation of Coal Production.

10. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Production level (per EMP clearance) to be considered in totality for an entire Coalfield To the extent some mines are failing to achieve the rated production, the other mines should be allowed to exceed the production limit imposed by EMP clearance. Total pollution load generated in that particulars coalfield will not exceed the limit prescribed by them. EMP Clearance for an entire Coalfield

11. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP On account of Land Acquisition difficulties, quite a number of projects spread over different coalfields have either not taken off or else are operating at sub optimal levels. For this reason production is not being obtained at the levels cleared by MOEF while granting the Environment Clearance. On the other hand, there are mines where land is available and where from production can be increased but this is not being possible on account of lack of Environmental Clearance. If these mines are allowed to increase their production to the extent, other mines having Environmental Clearance are not achieving their rated production level, the total pollution load that would be generated will not exceed the level approved by MOEF. It should therefore, be possible and logical for MOEF to permit the ongoing mines not facing land constraints to increase their production level to make up for the short fall from those mines where land is a problem EMP Clearance for an entire Coalfield

12. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP 300 U/G Mines in India, 273 with Coal India 300 mines produce just ~ 40 mtpa Avg size = ~ 0.13 mt per mine p.a. Reserves available at most of these mines are however, very large Low production attributable to primitive technology and low level of mechanisation Huge investments made since nationalization but results quite disappointing Progress limited to adoption of intermediate technologies like LHDs & SDLs. Lately Continuous Miners have been used successfully at some Mines. By adopting this technology, the average production level from U/G Mines could be substantially increased. UG Mines

13. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Task force to study the geology of the individual mines for selecting units where Continuous Mining Systems could be introduced. Sustained campaign for introducing these technologies at selected mines  Sizeable increase in production within a short time UG Mines – Task Force

14. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Coalfields actively mined for quite long have reached near saturation level in production. Large scale production increase possible only from Coalfields like North Karanpura, Mand-Raigarh, Talcher and IB Valley. These coalfields suffer from very poor Rail infrastructure – limits increasing production Substantial increase in production attainable if rail infrastructure strengthened to ensure prompt evacuation of Coal. Since Coal companies have investible funds available, Railways should start laying new rail lines and adding/ improving the Railway Sidings in these coalfields. Infrastructure – Rail

15. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Even at places where Rail facilities are available, transport of Coal to the sidings becomes a problem on account of poor condition of the Roads. New Roads can be constructed and existing ones improved quickly Prompt evacuation of coal will create conditions for improvement in production. Infrastructure – Road

16. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Dominance of Public Sector will continue in Coal Industry even in future. Right since the time when Contract Labour (Regulation and Abolition) Act was passed, Public Sector adopted the practice of carrying out all elements of mining operation including ancillary activities like maintenance of building etc departmentally. In most of the efficient coal producing countries, mining operations are being carried out by specialized agencies working as mining contractors. Even in India, coal transport from the Faces to Stocking Points/Sidings and OB Removal ( part/full) are being carried out contractually in many mines. Reorienting the contract system so that reputed Corporate Houses are attracted to undertake contract mining/MDO. Modern mining technologies, management systems and ethical industrial relation practices would be adopted ---- Quick increase in production Private Public Partnership (PPP) in MDO

17. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Gradually the effective working hours in Indian Coal Mines has been going down and its as low as 10-12 hours per day. One of the reasons is the Wage Structure in the Coal Industry which is related to time and not to results. While it is difficult to change the structure drastically, a properly designed Incentive scheme could go a long way in increasing the working hours and consequently the coal production. Incentive Scheme

18. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Equipment maintained in India mostly by Mine Owners/Operators. Due to skill/discipline problems, maintenance standards have not been good  Poor availability and utilization of the equipment. In Opencast Mines (90% of the Indian coal production), Equipment Cost = Major part of the Capital Investment. Poor availability and utilization of the equipment hurts not only the production but also the economics of the operation. Most of the Equipment manufacturers now willing to get into Maintenance and Repair Contracts (MARC) where a certain level of availability is assured. This concept has already been tried at some of the units with satisfactory results. This could be adopted on a larger scale for obtaining quick increase in coal production. Equipment Maintenance

19. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP That Environment has got to be protected so that an inhabitable earth is handed over to the future generation is beyond debate But this also is beyond debate that as our Late Prime Minister Mrs Gandhi put it “Poverty is the biggest Pollutant”. Poverty has got to be addressed effectively for improving environment and this can be done only by ensuring adequate and economically viable supply of Energy. A balance has therefore to be struck between Environmental considerations and the urgent need for Economic advancement of the country. The question of Forestry and Environmental Clearances has therefore to be looked at from this angle. Forestry and Environmental clearance

20. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP Primary reason for difficulties in Land Acquisition = Intense emotional attachment of people to land. Right now, mining industry acquires land on permanent basis and the acquired land is not put to use once the mining operations are over. Instead land could be taken on lease with clear cut assurance to the land owners that the land will be reclaimed and handed over back to them after the mining operations are over. Naturally reclamation has to be done such that reclaimed land is useful for economic activities like Agriculture and Horticulture etc. This will no doubt cost some money but will go a long way in giving confidence to the land owners that loss of land is only temporary. During the period that the land is used for mining operations including the time required for reclamation, the land owners should be paid generous lease rent, which should be 2-3 times the value of their current income from the land. In all likelihood, this will go a long way in softening the resistance of the land owners. It is a pity that the country’s economic progress is suffering for shortage of coal of which the country has huge resources. Adoption of a pragmatic approach directed at balancing the Environmental considerations with the need for economic development which will naturally contribute to Environmental improvement would surely go a long way in bridging the gap between Coal Demand and Domestic production. Land Acquisition

21. Business Sectors At a glance Vision & Values SustainabilitySocial ResponsibilityResearch & Development ADITYA BIRLA GROUP It is a pity that the country’s economic progress is suffering for shortage of coal of which the country has huge resources. Adoption of a pragmatic approach directed at balancing the Environmental considerations with the need for economic development which will naturally contribute to Environmental improvement would surely go a long way in bridging the gap between Coal Demand and Domestic production. Conclusion

22. Business Sectors At a glanceVision & ValuesSustainability Social Responsibility Research & Development ADITYA BIRLA GROUP Thank You www.esselmining.com www.adityabirla.com