Dig for new mines: coal ministry told

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New Delhi, May 27: The government has directed the coal ministry to undertake a fast-track growth plan for the sector. In view of the acute shortage of coal faced by the power, cement and steel industries, the Prime Minister’s Office is learnt to have asked the coal ministry to expedite the approval of new mining projects.

"Currently, there is a gap of about 27 million tonne between the coal demand and the supply," a senior government official told FE. The gap is expected to widen from 42 million tonne in 2006-07 to 95 million tonne in 2011-12.

Even though the sector posted a higher annual growth rate of 6% in April-February 2004-05 as against 4.9% in the year ago period, the growth rate fell to a low of -0.3% in February 2005 from a high of 7.7% in December 2004. This has serious implications for the country’s import bill as 80% of the power plants in the country are coal-based.

A large number of proposals for the development of coal mines had not even been taken up with the ministry of environment and forests and the public investment board (PIB), said the official.

The PMO has thus asked the coal ministry to submit an exhaustive list of all proposed new coal mine projects for which detailed project reports are pending.

The PMO has also directed the ministry of oil and natural gas to work towards bringing growth in the sector. The sector had so far been achieving targets but growth was stagnant, the official said. The annual growth rate in petroleum refinery products has declined sharply from 8.1% during April-February 2003-04 to 5% in the corresponding period of 2004-05.