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MAY 29 2014

Open commercial mining to pvt sector: Coal ministry to Goyal

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 29th MAY 2014

Given the widening coal demand-supply mismatch, officials of the coal ministry have requested the new minister Piyush Goyal to pitch for the opening up commercial coal mining to the private sector.

Given the widening coal demand-supply mismatch, officials of the coal ministry have requested the new minister Piyush Goyal to pitch for the opening up commercial coal mining to the private sector.

The ministry officials in a presentation for the minister, which would also be put before PM, highlighted a list of measures, including expeditious completion of work on three critical rail links for coal evacuation, lifting Comprehensive Environment Pollution Index (CEPI) imposed moratorium on mining from three coalfields at Singrauli, Jharsuguda and Chandrapur, faster decisions on "in-violate areas" and adoption of a more coordinated approach between coal production and coal-based capacity addition as holding key to enhance coal production and tide over the crisis like situation evolving in the country.

Coal demand in the country is projected at 787 million tonne (mt) in 2014-15 while the offtake target is 644 mt, leaving a gap of 143 mt that would largely be met through expensive imports. The situation, as per coal ministry data, would turn worse in the terminal year (2016-17) of the current Plan when demand is projected to rise to 981 mt while projected production (under business as usual scenario) is around 715 million tonne, leaving a huge gap of 266 million tonne.

"The current model where Coal India enjoys absolute monopoly in terms of development of coal blocks could hamper accelerated growth of coal mining in the country. The immediate remedy to tide over the issue of rising demand-supply mismatch is to open up the sector and allow private sector to develop mines using latest technology with minimal damage to the environment," said a government official.

Currently, state-run firms such as CIL enjoys absolute monopoly over coal mining and sale in the country. Private companies are allowed to mine only for captive consumption.

Allowing private entry into commercial coal mining would mean amending the Coal Nationalisation Act.

The Coal Nationalisation (Amendment) Bill, 2000, introduced in the Rajya Sabha by the earlier NDA government could also be revived to carry forward this reform initiative.

The coal ministry would also push for PMO intervention expeditious completion of work on three critical rail links - Tori-Shivpur-Kathotia (Hazaribagh), BG triple line for the North Karanpura coalfield (CCL Jharkhand) and Jharsuguda-Barpali BG double line for IB Valley coalfield (MCL, Odisha). These rail connectivity projects are necessary for coal evacuation from potential coalfields--IB Valley, North Karanpura Mand-Raigarh - having potential to add 200 mt of coal annually.

Tags

Jharkhand Odisha Coal Coal India Limited Mahanadi Coalfields Ltd PMO CIL coal mining India

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