The Centre will soon allot coal blocks to state governments and state entities for commercial mining so that consumers such as brick kilns, which neither require a huge quantity nor meet the criteria to participate in auctions, can get the fuel.
Coal secretary Anil Swarup, on the sidelines of an interactive session organised by the Coal Consumers’ Association of India (CCAI), said the Centre will first allot blocks to coal-bearing states and, at a later stage, will see if non-coal bearing states can also be allotted mines for commercial use.
“In one month the blocks will be identified for allocation to the states for commercial mining. The states along with government firms can develop the blocks. The policy for distribution of coal will be left with the states but the states may take the Centre’s help in formulating it,” Swarup said.
The centre has so far allocated 39 blocks to various state entities for end-use mining. Swarup said another 16 would be put up for auction — five in the non-regulated sector and 11 in the regulated sector — and “more and more and blocks will be in the offing,” Swarup said.
He said the 204 blocks that would be put up for auction have a peak rate capacity of 900 million tonne (mt) and the Coal India (CIL) board has approved the mine-wise plan and agreed to ramp up output to up to 908 mt. “Coal will seize to be a problem in 3-4 years,” Swarup stressed, adding that by 2020 the country would be able to produce 1.5 billion tonnes with 1 billion tonne coming from CIL and the rest from non-CIL sources.
Although CIL’s production has been growing at an average 2% in the last 4-5 years, Swarup said with plan-wise mining, growth could increase manifold.
CIL chairman Suthirtha Bhattacharya said the company came up trumps by creating a record incremental increase in a single financial year, producing 494.23 mt in the just-concluded FY15, registering growth of 6.9%.
“The increase in production in absolute terms was 31.81 mt, which is the highest-ever incremental increase in a single financial year since the inception of the company”, Bhattacharya said, adding in a single year CIL achieved 42.5% of the absolute increase of 74.93 mt recorded during the entire XI Five-Year Plan.
“The important challenge is to ramp up our production to match with the targets and sustain it, “ he added. During the last four financial years, the absolute increase in coal production was 31.16 mt, whereas the production increase in volume terms took a quantum leap to 31.81 mt in FY15 alone,” Bhattacharya said.
However, on linkage, Swarup made it clear that only those who participate in coal block auctions will be entitled for linkages. But the government was yet to take a final decision on linkage auction.
“We want to create a transparent mechanism for linkage and this may not be essentially auction. A policy paper for linkage will be released on June 30,” Swarup said.