The first 100-day agenda of the Narendra Modi government if voted to power again would include operationalising 12 new coal mines, near-exclusive transfer of coking coal blocks to steel companies willing to set up washeries via auction route, source in the know told FE. A policy for the critical minerals other than those covered under a recent policy is also in the works, they added.
Additionally, the coal ministry also aims to launch the Request for Proposals for gasification projects announced in FY24 and come up with a revised production plan for the country’s coal mines.
“One of the agenda is to operationalise 12 new (coal) mines with a combined capacity of 58 million tonnes of coal,” a source said. “We also want to launch RFPs (request for proposals) for coal gasification projects and are going to issue a new policy for minerals.”
The Union Cabinet in January had approved a multi-pronged scheme to promote coal/lignite gasification projects by state-run and private-sector companies with an outlay of Rs 8,500 crore. It also approved two joint venture projects for coal gasification between Coal India and GAIL and Coal India and BHEL, both to be operationalised by 2028-29.
As per the source, the coal ministry is charting out a new policy wherein the ownership of any other mineral – critical or rare earth elements– found within a coal block will mostly go to the respective mining company, with very little share for the government.
“We are auctioning coal blocks, in case anybody finds other minerals by chance, we want to give them ownership of those minerals also. They will mine it,” said the source. “The government will have a share, we are thinking about how much. We want to keep it as minimal as possible, because otherwise people will not come forward to mine that.”
Under the revised mine plan for the country’s mines, the government will form guidelines relating to restoration of the land to pre-mining condition stage, monitoring of closure, regeneration of biodiversity, and monitoring of soil, ground water, vegetation, surface water, and pollution levels. With the plan, the government intends to close 103 de-coaled mines in the next two years. Moreover, it intends to come up with a “business-friendly” land use policy for companies.
“Currently, there is no such action plan. They (miners) just put soil back. We have 103 de-coaled mines and we have actually prepared plans to close these mines,” said the source. All these mines would be closed in the next two years. “We have set up funds for these mines and want to close these mines as per these principles. So for that, we have formed a small committee, they will submit the report, and we will appoint it and issue the guidelines,” the source added.
After the achievement of 1 billion tonne coal and lignite production in the financial year 2023-24 in its attempt to stop coal imports, the government has now turned its focus to reducing imports of coking coal – typically used in steel making.
For the same, the government will now auction coal to the steel sector via way of washeries, the source said.
Currently, the government is not auctioning mines through washeries. Any firm which wants to set up a washery will now be provided with a separate window, a move which could also help reduce coking coal imports.
Over the years, owing to the shortage of coal, the good quality coal produced by Bharat Coking Coal Ltd (BCCL) primarily to be used in steel making, has been supplied to the power sector. “With this move, we are going to have a plan wherein BCCL’s coal will be provided to the steel sector. They can wash this coal and then blend it for steel making.”
In a similar move to reduce coking coal imports, Central Coalfields is building five new washeries which will be able to reduce the ash content in the produced coal to 16% from the current 19%, the company’s director (technical) Ram Baboo Prasad had earlier said.
Currently, there are only two companies – BCCL and CCL, both subsidiaries of CIL – that produce coking coal in the country and India has to rely heavily on imports due to the high amount of ash content in the coal produced indigenously. To obtain coking coal – used in the steel industry, the percentage of ash should be less than 12%. Presently, India imports approximately 70% of its coking coal requirement.
During FY24, Coal India and other captive mines cumulatively produced 66.63 million tonnes of coking coal, up from 60.76 million tonnes in FY23, as per government’s latest data. The country imported 48.29 million tonnes of coking coal up to January in FY24. Import data till March was not available. Imports in FY23 stood at 56.05 million tonnes, coal ministry data showed.