Thursday, 15 May 2014

Govt set up panel to identify more coal blocks for auction

With an aim to enhance the domestic coal production, the government has set up a nine-member panel, which will identify more blocks in addition to already selected 54 mines, for sale through competitive bidding. The panel’s members have been drawn from the Coal Ministry, Coal India and its subsidiaries and office of the Coal Controller. The panel will select coal blocks from areas explored after 2008. The panel will also examine the present status of Coal India (CIL) in the development of already allotted blocks to it and find out scope of re-allocation of blocks to CIL. Besides, the panel will also examine the status of CBM (coal-bed methane) blocks, areas relinquished by operators and also identify de-allocated blocks having no legal dispute.
The Government has already offered three coal blocks for auction in the region of Jharkhand and West Bengal for the captive use for steel, cement and sponge iron companies.Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is also struggling to meet domestic coal requirements and its production fell 4.21 percent short of its production target at 462.53 million tonnes in FY14 amid some mining concerns.
India, despite being world's fifth largest in terms of reserves and the third-largest producer of coal, has failed to keep pace with increasing domestic demand. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. Meanwhile, newly constituted panel would expedite the coal auction process and soon invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which will also end the monopoly of public sector unit Coal India.

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