The Hindu Business Line : Centre not keen to allot coal blocks for CTL projects

The Centre is not keen to allot coal blocks for coal to liquid (CTL) projects. A number of corporates from India and abroad, including the Tata Group, Reliance and Sasol have expressed their interest in such projects.

“We are not too keen on CTL projects,” the Union Minister of State for Coal, Mr Santosh Bagrodia, told the members of Indian Chamber of Commerce here recently. “We are not giving too much priority to these project proposals. Our first priority is to produce enough coal to meet the increasing demand in the country,” he added. The minister was addressing an interactive session at the chamber.

According to available information, coal liquefaction projects generally require coal blocks capable to produce approximately 20 million tonnes a year. The Coal Ministry has already received a proposal from Tata-Sasol for a CTL project estimated to cost approximately $6-8 billion. A similar proposal was also received from Reliance.

Distribution policy

Commenting on the new coal distribution policy which is now under implementation, Mr Bagrodia said that for the first time in history PSU coal companies would enter into an equally and identically obligatory compensation clause with the consumer.

The new policy was expected to make coal companies more efficient and competitive, he said. “I am hopeful that in a year from now coal companies will be competing with each other to get a larger market share,” the minister said.

On the coal production projections, he said that Coal India Ltd was asked to take steps to increase production by 10 per cent during the next one year.

Steps are also taken to ensure purchase of modern machineries in this effect.

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