The Centre would bring the coal sector under the national monetisation pipeline aggressively even as it has relaxed norms forbidding coal blocks, wanting them to handover over to the qualified bidders, risk-free.
Coal secretary, Anil Kumar Jain, said the government was looking at monetising the first-mile connectivity (FMC) projects and the railway projects, which CIL was developing solely or through JVs. “FMC should be outsourced, we are for the outright sale of CERL (Chhattisgarh East Railway, a venture of CIL, Railways and the Chhattisgarh government). It should be monetised. CIL should be brought under NMP,” said Jain.
CIL has earmarked Rs 14,000 crore investments in two phases by 2025 for the FMC projects and Rs 19,650 crore for the railway projects by 2024 to enhance evacuation of the increased coal production.
Jain, at the Minerals, Mining and Metals e-conclave of the Bengal Chamber of Commerce, said, although the Indian mining and mineral sector has fallen to a degree of uncertainty for the outcome of COP-26, the sector, especially the coal sector, has also witnessed some positive turns with the latest round of coal mines auction getting responses from bidders.
“The current round, for which today (Thursday) was the last date of application, have got two or more bids for 18 mines, we have offered. Some were legacy mines but the addition of some more new mines has created interest”, Jain said adding, this was seen as a positive turn since the previous round didn’t get much response as the first tranche of auctions did.
The norms for the latest tranche of auctions putting 88 coal mines on offer have reduced upfront payment and would adjust the upfront amount against royalty. While 100% FDI has been allowed via the automatic route, the government has also relaxed efficiency parameters for operational efficiency. The new auction module has devised reasonable financial terms and revenue sharing model based national coal index.
Jain said for coal gasification revenue sharing has been raised at 50% from earlier 20%.
Naveen Jindal, chairman, Jindal Steel and Power Ltd, said although a lot of initiatives have been taken to reform the mining sector, there should be a single-window mechanism for obtaining all clearances. India, holding the fourth-largest reserves of coal, should create an enabling environment to exploit the reserves decreasing tax burdens and taking care of the fact that the competitiveness of the Indian entrepreneurs doesn’t erode.
However, uncertainty on the sector, for the outcome of COP-26, would gradually move away with all stakeholders putting in place a road map to accomplish India’s commitment of being net-zero by 2070. A carbon budget was required much in the lines of the UK when it decided to reduce the use of fossil fuel way back in 2007, Jain said. Europe’s proposition to impose a cross border adjustment mechanism (CBAM), meaning the imposition of taxes for imports from countries mining a lot of coal would hurt India, but “we will have to address our environmental concerns without compromising with our economic goals” he said.