Coal-India-Running-on-Empty.pdf - CIL\u2019s extractable coal reserves could be exhausted in 17 years Contents Glossary Section 1 Executive Summary 2

Coal-India-Running-on-Empty.pdf - CIL’s extractable coal...

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CIL’s extractable coal reserves could be exhausted in 17 years
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September 2013 Published by: Greenpeace India Authors: Ashish Fernandes (Greenpeace), Tom Sanzillo (Institute for Energy Economics and Financial Analysis (IEEFA) Research: Sunil Dahiya and Arundhati Muthu, Greenpeace Contact: [email protected] Design by: Shagun Mitra Printed on 100% recycled paper Contents Glossary Section 1: Executive Summary 2 Section 2: Current Status of Coal India’s Reserve Estimates 4 Section 3: Implications for Coal Reserves and Future Energy Planning 10 Section 4: Investor Risks and Questions for Coal India 12 Section 5: Technical Discussion of Coal India’s Reserves, Risks to Reserve Assessment and Viability of Imports 14 Section 6: Conclusion 23 Section 7: Endnotes 24
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Glossary BSE BT CAD CIL CMPDIL CRIRSCO GDP GSI INR IPO ISP JORC MoEF MT NSE SEBI TERI UNFC UN-ECE USD Bombay Stock Exchange Billion Tonnes Current Account Deficit Coal India Limited Central Mine Planning and Design Institute Limited Committee for Mineral Reserves International Reporting Standards Gross Domestic Product Geological Survey of India Indian Rupee Initial Public Offering Indian Standard Procedure Joint Ore Reserves Committee Ministry of Environment and Forests Million Tonnes (metric) National Stock Exchange Securities and Exchange Board of India The Energy Resource Institute United Nations Framework Classification for Fossil Fuel and Mineral Resources United Nations Economic Commission for Europe United States Dollar
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Executive Summary Section 01 Coal India Limited (CIL) is one of the largest coal producers in the world, accounting for 80% of India’s coal production. It is tasked with supplying coal to most of the country’s power plants. The Government of India holds a 90% stake in CIL, with the remaining 10% held by Indian and overseas financial institutions, pension funds and other investors, pursuant to a 2010 IPO that drew significant international capital. The Government of India aims to further reduce its holding through a follow on share offer in the markets. CIL’s current measure of its extractable reserves, by its own research subsidiary the Central Mine Planning and Design Institute Limited (CMPDIL), is 16% below estimates contained in the 2010 IPO. CMPDIL commenced this assessment prior to the issuance of the 2010 IPO and academic researchers have been commenting on the issue of overstated coal reserves for nearly a decade. In 2001, the State of India abandoned the standards used by CIL to derive its estimates. There remains significant uncertainty about the true extent of CIL’s extractable reserves. Given the continued emphasis being placed by the Government of India on coal to deliver India’s energy needs, the Indian Chamber of Commerce considers an accurate account of CIL’s extractable reserves as a critical reform to the nation’s coal policies. CIL has consistently failed to meet production targets. The resulting coal shortage has affected power generators. This analysis places the coal reserve issue as part of a broader risk scenario that
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