Ambarish Mukherjee

New Delhi, Feb. 13

THE Union Government is working on a plan to increase the availability of coal in the country by permitting companies, which have been allocated coal blocks for captive use, to produce in excess of their requirements and sell the extra quantity.

However, these companies will not be able to sell the extra coal they produce directly in the market. They will have to route it through a coal-producing subsidiary of Coal India Ltd (CIL).

The move is aimed at ensuring the energy security of the country, because the non-core sector is currently not getting the amount of coal it actually needs, Coal Ministry officials said.

As of now, the total coal produced by Coal India and Neyveli Lignite Corporation Ltd (NLC) is around 450 million tonnes (mt). There is a demand-supply gap of approximately 22 mt and import has become unviable because of very high international prices. As of now, 42 coal blocks have already been allocated for captive mining. However, the majority of these blocks are yet to start production, officials in CIL told Business Line.

Meanwhile, to decentralise the approval of mining plans, the Government has authorised the Central Mining and Planning Development Institute Ltd to approve mining plans for public as well as private sector companies. Earlier, a Standing Committee constituted by the Ministry of Coal under the Minerals (Mining and Development) Regulation Act was authorised to approve all mining plans.

Apart from the 42 blocks already allocated for captive mining, the Ministry is currently considering the allocation of another 30 blocks to power, steel and cement companies. The screening committee in the Ministry has already examined the allocation of 21 blocks belonging to Western Coalfields, Central Coalfields, Mahanadi Coalfields and South-Eastern Coalfields, the officials said. Within the next few weeks, blocks under Northern Coalfields and Eastern Coalfields will be taken up by the Standing Committee for consideration, they said.

(This article was published in the Business Line print edition dated February 14, 2005)
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