The `dirty` saviour

Coal is the largest single source of fuel for the generation of electricity worldwide, as well as the largest source of carbon dioxide emissions, which is the primary cause of global warming.

China, the US and India, the top three consumers of coal in the world, are also the number one, two and fourth largest producers of coal. The three musketeers also happen to be heavy importers of crude.
Pure economic sense demands that they use the available coal reserves as power from coal is cheaper and coal is more abundantly available than crude. But whether Al Gore likes it or not, the trio will keep on sending plumes of carbon dioxide into the atmosphere for many more years to come.

India has about 10 per cent of the world’s coal reserves. The known reserves are 253 billion tonnes, of which around 96 bn tonnes are proven. But Indian coal has high ash content (15-45 per cent) and low calorific value.

While we only produce around 20 per cent of what China does, our reserves are just 25 per cent lower than those of China. That means we are not utilising our resources properly. This offers ample opportunities for the public-private partnership model.

Currently, coal deposits in India occur mostly in thick seams and at shallow depths. Almost two-thirds of the proven reserves are placed upto a depth of 300 metres. As a result, mining has been predominantly open cast.

But all this is set to change with greater enforcement of safety and environment laws. With the advent of public-private partnership, underground mining will get a boost. But this will be more capital-intensive and less profitable.

Despite gas being available from 2009 onwards, the bulk of the power plants that will come up in the 11th Plan will be coal-fired. Around 46,635 MW of coal-fired thermal capacity is scheduled to come up by 2012 against just 2,114 MW of gas-fired plants. This will mean more coal requirement, apart from feeding the current plants.

All this translates into better business scenario for companies that make coal-handling equipment, as more coal will need to be handled at the mines, railways and power plants.

Business Standard