Industry seeks allocation of larger blocks for commercial coal mining

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Published: February 15, 2019 2:07:14 AM

Offer for larger coal blocks for commercial mining by the private sector and a separate commodity exchange for the sector were identified by industry veterans as ways to bolster commercial coal mining in the country.

coal, coal sector, coal industryPrivate players have also stayed away from the auction of captive mines, where production levels have been low.

Offer for larger coal blocks for commercial mining by the private sector and a separate commodity exchange for the sector were identified by industry veterans as ways to bolster commercial coal mining in the country.

Speaking at an event on commercial coal mining organised by industry body Assocham here on Thursday, sector representatives also called for single-window clearance to expedite commercial coal mining.

The cabinet committee on economic affairs had approved the auction methodology for commercial mining for the private sector in February, 2018. However, there has not been any significant development yet on this front. Auctions can be expected after the general elections, a coal ministry official said on the sidelines of the event.

Kapil Dhagat, who heads the coal business unit at Jindal Steel and Power, said coal blocks with large reserves should be offered for commercial mining as that would reduce mining costs and justify the huge investments on procuring equipment and technology to maximise efficiency.

Private players have also stayed away from the auction of captive mines, where production levels have been low. The last two tranches of auction for coal blocks, where 15 mines were offered, had to be cancelled as they could not even elicit three bidders to participate.

The coal ministry has recently invited tenders for 19 captive mines, where it has proposed to allow private companies to sell up to 25% of production in the open market. However, as FE reported earlier, the North Block had sought clarity from the coal ministry about the new provision to attract investment.

The industry has attributed the complexities related to procuring environmental, forest and mining-safety clearances to begin coal mining as a major impediment to private participation.
Espousing the concept of “responsible mining”, Vinay Prakash Goel, chief executive, Adani Coal and Mining, said the perception on mining needs to change with increasing community engagement as the local population hold significant stake in mining projects.

Supriyo Gupta, policy advisory head, SBI Capital Markets, said a spot coal commodity exchange should be envisioned with the market dynamics of the power sector — coal’s biggest consumer — changing with the visibility of new long-term power purchase agreements becoming thinner.

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