Repeated extension of the moratorium on expansion of industrial activities has not allowed the company to line up new projects to ensure future production growth.

Coal India is expecting eight more mining projects to clear the CEPI (Comprehensive Environmental Pollution Index) deadlock soon. According to a senior CIL official, of the 52 projects which were stranded by repeated extension of the CEPI moratorium, five were recently cleared by the Union Ministry of Environments and Forests (MoEF).

Formal approval

“The review of eight more projects is over. We are expecting MoEF to grant formal clearance to these projects soon,” the CIL official said, adding that the company was losing close to 100 million tonnes of production on environmental grounds.

To add to the woes, repeated extension of the moratorium on expansion of industrial activities to 18 months, from March 2010, has not allowed the company to line up new projects to ensure future production growth.

Introduced in March 2010, CEPI takes into account all kinds of pollution and does not entertain applications for environmental clearance either for any new industrial projects or expansion of the ongoing projects in the areas where the index hits the stipulated ceiling.

According to the guidelines, environment in many of the opencast mining areas are found to have been highly polluting.

Since open-cast mining by nature requires expansion to maintain production in a particular reserve, the moratorium has hit CIL (or other such mining entities) the hardest.

The issue was also reportedly appreciated by the Planning Commission which was found repeatedly revising CIL's production targets downwards in 2010-11. As against an original target to produce 520 mt in 2010-11, CIL ended the last fiscal with 431.33 mt production, without any growth. The company produced 431.26 mt in 2009-10.

While the production for the current year is unlikely to witness any major growth, CIL is trying to increase the availability by liquidating its 70 mt pit-head stock of coal.

Import contracts

Meanwhile, CIL will close the ongoing tender for long-term coal off-take (import) contracts from overseas sources on May 23. “The initial response to our tender is positive,” the source said.

CIL has already shortlisted 29 proposals from 15 companies to participate in the bidding process.

(This article was published on May 11, 2011)
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