UPA government looks beyond CIL for coal production

New Delhi: With a political consensus on allowing the private sector in commercial coal mining eluding, the UPA government has intensified efforts to rope in public sector companies to expand the production base beyond the Coal India Ltd’s (CIL’s) domain.

The government has allotted 35 coal blocks to several state and central PSUs to take up coal mining without the restriction of captive mining.

With only two blocks allotted for commercial mining prior to 2004, huge coal reserves of more than 6,000 million tonnes have been made available to mining development corporations of major coal-producing states and central PSUs such as MMTC and NMDC.

“With coal requirement in the country expected to increase to 2,000 MT from the present 450 MT, the UPA government is exploring all avenues to increase the production base,” Minister of State for Coal Dasari Narayana Rao said.

The Coal Mines Nationalisation (Amendment) Bill was introduced in the Rajya Sabha in 2000. The Bill has since been stuck for want of political consensus.

During 2006-07, the West Bengal Mineral Development Corporation has been allotted five blocks with total reserves of 1,117 million tonnes, followed by the Chhattisgarh Mineral Development Corporation, which three blocks containing 1,053 MT.

The MP State Mineral Corporation Limited was allotted 10 blocks with 1,037 MT coal and the Jharkhand State Mineral Development Corporation got seven blocks with reserves of 100 MT.

Besides, Mineral Development Corporations of Maharashtra, Gujarat, Orissa, Bihar, Andhra Pradesh have also been allotted coal blocks by the UPA government.

Rao said while private sector companies are being allowed in coal mining for captive use, the central and state PSUs are permitted under the Coal Mines Nationalisation Act to take up coal mining for selling of coal in the open market.

He said the 35 blocks allotted to state and central PSUs have the potential of producing 150 million tonne of coal per year which can supplement the efforts of CIL and Singareni Collieries Company Ltd (SCCL) in the context of growing demand.

During 2006-07, CIL produced 36 MT of coal with SCL contributing 37 MT, the minister said. “With the efforts being made by the UPA government, the domestic coal production could go up to 1,500 million tonne during 2016-17 against only 431 MT during 2006-07,” he pointed out.

Rao said that to ensure timely production from the blocks allotted to central and state PSUs, the government has made it mandatory for the allocates to furnish bank guarantees.

“Development of these blocks on time for commercial mining can also improve the finances of the state mining corporations besides making available the much-needed coal to consumers,” the minister pointed out.

A total of 172 blocks with reserves of 38 billion tonne have so far been allotted for captive and commercial mining outside the domain of CIL and SCCL. A production base of over 800 MT of coal per year from captive mines has already been created, he added.