The Mining and Mineral industry comes under Basic Material group. It’s a commodity type industry.

Industry Strengths

Large and growing demand from power sector for coal
Good demand for ores from China, Japan and other countries
Large reserves of coals and ores in India

Industry Weakness

Uncertain government policies with regard to mining rights and royalty
Tough environmental regulations
Illegal mining by small players
Court actions for banning mining in certain areas
Supply of low quality of coals and mines
Import of coal due to high consumption in the country
Impacted negatively by rupee depreciation due to imports
Over dependence on China for exports of ores

Growth Drivers

Global economic growth which leads to industrial activities and consecuently demand for raw material
Growth in power, steel, cement and aluminum industry

Coal India is the world’s largest coal reserve holder and producer and also controls ~80% of the Indian coal market. It is one of the least cost producers of coal in the world.

It sells ~15% of its production based on the e-Auction route and ~3.5% beneficiated coal (2x realisations of raw coal).

CIL operates through approximately 82 mining areas spread over eight provincial states of India.

Segments and Products

The Company offers products, including

1.Coking Coal,
2.Semi Coking Coal,
3.Non-Coking Coal,
4.Washed and Beneficiated Coal,
5.Middlings, Rejects, Coal Fines/Coke Fines, and
6.Tar/Heavy Oil/Light Oil/Soft Pitch.

Its Semi Coking Coal products are used as blend-able coal in steel making, merchant coke manufacturing and other metallurgical industries.

Its Non-Coking Coal products are used for cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing, and for other heating purposes.

The Washed and Beneficiated Coal products are used in the manufacturing of hard coke for steel making and power generation.

Its Middlings are used in power generation, brick manufacturing units and cement plants.