The Hindu Business Line : `India to adopt global classification of coal from next fiscal'

INDIA will adopt the internationally accepted gross calorific value (GCV) based classification of coal from the next financial year and discard the existing system of useful heat value (UHV) based classification.

This was announced by the Minister of State for Coal and Mines, Dr Dasari Narayan Rao, while delivering the keynote address at the Coal Summit 2005 here on Wednesday.

This would imply that Indian coal would henceforth be categorised on the basis of heat and not ash and moisture content.

The GCV for coal is defined as the amount of heat evolved when a unit weight of the fuel is completely burnt. Under the UHV system, coal is categorised on the basis of ash and moisture content in the coal.

Dr Rao said that, "We have been following the UHV system for grading coal since 1963. With the advent of globalisation it is now imperative that we also adapt the internationally accepted GCV system of classification. I am hopeful that by March 2006, this changeover would be made."

The Minister said that investments to the tune of Rs 1,34,300 crore was required in the coal sector by 2025 to ensure energy security of the country.

The tentative investment requirement includes Rs 95,000 crore in open cast mining, Rs 23,000 crore in underground mining, a minimum of Rs 8,000 crore in coal beneficiation, Rs 7,000 crore in overseas equity and Rs 1,300 crore in exploration, he said.

The Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, while delivering his address stressed on the need for expanding production keeping in view environmental sustainability, open import of coal, fixing coal prices according to its GCV , efficient marketing and development of transportation linkages.

Mr Ahluwalia said the commission favoured zero per cent import duty on coal and crude oil, besides advocating de-nationalisation of the coal sector and opening it for private investment.

"I am in favour of zero per cent import duty on coal and crude oil if there is no argument for protection," he said, drawing a parallel between import of crude oil and coal to fulfil the energy requirements of the country.

He also said that domestic coal prices should be aligned with the international price regime.

Addressing the summit, the Coal India Ltd Chairman, Mr Shashi Kumar, wondered why the power utilities were being asked to import coking coal despite abundant reserves of the same in the country and asked coal majors to ensure uninterrupted supply of the coal variety to the power sector.

He said that the current policy on project approvals, land acquisitions, clearance of Environment Management Plans are acting as deterrents to the growth of coal industry in India.

"Although the power sector was served by the coal sector, and the former enjoys the status of infrastructure sector, the latter has been denied the same impeding its growth, which merits serious consideration," Mr Kumar said.

The Coal Secretary, Mr P.C. Parakh, said that though the demand for coal in India is increasing, mining activities still remaining the fiefdom of a handful of State-owned companies and opening the sector for private investments was imperative to render the industry globally competitive.

"While the policy of captive mining has opened the way for private investment in coal mining in a limited way, looking at the projected demand for coal in the country, it is high time that coal mining is opened to private sector," he said.

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