Tuesday, March 25, 2008

Indian coal secretary favors private sector involvement in coal mining

by Jo Black

As on date, Coal Mining is primarily a Nationalised industry, said Mr. H C Gupta, Secretary, Ministry of Coal at the second meeting of the Confederation of Indian Industry (CII) National Committee on Mining on 24th March 2008 at New Delhi. He mentioned that almost 94% production of coal in the country is attributed to the public sector namely Coal India Limited and its subsidiaries. In the last few years, a large number of coalmines have also been allotted to the private as well as public sector. So far, the private sector was allotted blocks for captive mining only to cater to power plants, cement industries, etc.

The Secretary, Coal informed members at the meeting that during the last 3-4 years, from all coal mines that were allotted with a total production of 460 MT, only 30 MT came from the private sector. He lamented on the fact that the sector was looking at a change looking at larger private participation. In the 11th plan i.e. till 2011-2012, production is expected to increase from 460 MT to 680 MT. This growth pattern has not been achieved yet. Mr. Gupta anticipates that coal production currently at 20 MT at present from the private sector is expected to increase to 104 to 105 Metric tones during this period.

The Secretary informed the committee that the Coal sector scenario was poised to change in the coming 5 years and production from the non-nationalised sector will go up to 300 MT. Coal India Ltd., the largest coal producer in the country has a production of 360 MT and this is likely to go up to 400 MT during this period. A large part of production is anticipated from the smaller PSUs through outsourcing of contracts. Currently, all nationalized coal producers go for major outsourcing. He lamented the active role of the industry at this important juncture in the coal sector through high capacity machinery and technology.

Mr. Gupta informed that in the last years, no importance was given to underground coal mining. But in the new 11th plan period, special importance will be given through long haul methods etc. This would invite technology through the private sector.

He also mentioned that all coal block allotments for the power and steel sector will be done through International Competitive Bidding tenders and private sector would be invited to participate in the same. As of date 180 coal blocks with 40 Billion Tons reserves have been allotted. From these, 25 Billion tons had been allotted for the power sector alone. NTPC has been given large coal blocks from these with a production of 15-20 MT. NTPC will look at outsourcing the production works through the private industry. This way, he reaffirmed members that the role of the private sector was inevitable in the coal sector.

 

 

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