CIL produced 1.05 billion tonnes of coal between April 2011 and August 2013. Therefore, its extractable reserve figure should now stand at 17.15 billion tonnes. Approximately, 90 per cent of India’s coal inventory is non-coking coal. Using this yardstick, CIL’s extractable non-coking reserves (2011) were estimated at 15.4 billion tonnes.
CIL and the government target eight per cent rate of growth in production from 2012. If this rate were to be applied to CIL’s reserves, the company would exhaust extractable coal supplies by 2030. If CIL maintains a more realistic five per cent growth rate, the reserves would be exhausted by 2034.
Greenpeace pointed out that CIL had failed to disclose to the stock exchanges an internal assessment which showed its extractable coal reserves were 16 per cent less than stated at the time of its 2010 listing, a violation of Indian stock exchange rules. Further, Coal India was misleading potential shareholders by concealing the true level of its extractable reserves, as it prepares to sell additional shares to international investors.
Greenpeace campaigner Ashish Fernandes told reporters that Greenpeace India has filed a complaint with the Securities and Exchange Board of India (Sebi) against CIL for concealing material evidence on the scale of their coal reserves, in contravention of the terms of the Listing Agreement under the Indian Securities Contracts Regulations Act, 1956.
An email sent to Sebi did not elicit any response.
Fernandes added, “Coal India is trying to deceive its present and future shareholders by hiding the fact that its extractable reserves are almost a fifth less than it claims. Coal India has a legal duty to tell the truth and they are failing to do that.”
Fernandes said the new data about Coal India’s reserves also casts doubt on the government’s ability to sustain its planned investment in coal-fired power plants. CIL accounts for 80 per cent of the country’s coal production. Even though the company is struggling to supply existing power plants, India has plans to add more coal-fired plants to produce 100,000 MW by 2017. Spiralling coal imports have led to higher power tariffs and also played a role in India’s ballooning current account deficit.
Supreme Court Advocate Shaunak Kashyap said, “Coal India is in violation of statutory provisions particularly the Sebi Act, the Listing Agreement under the Securities Contracts Regulations Act, 1956, and Sebi’s April 3, 2006 circular relating to disclosure of material events. It is a matter of grave concern that a government-controlled company has failed to notify the exchanges of this reduction in their reserves, something that has serious implications for both investors and the country at large.”