Natural resources available here must not be imported: Pralhad Joshi

Twesh Mishra New Delhi | Updated on January 18, 2020 Published on January 18, 2020

Pralhad Joshi, Minister for Coal and Mines. Pic: Kamal Narang

‘Even after the coal industry is opened up Coal India will continue to be a major player’

The first round of commercial coal mining auctions will take place before the end of the current financial year 2019-20, according to Coal and Mines Minister Pralhad Joshi.

Speaking to BusinessLine, Joshi said that the goal of commercial coal mine auctions is to reduce coal imports. The government wants to limit coal imports to 100 million tonne per annum. He also said that Coal India Ltd (CIL) has enough mines and ability to sustain for another 100 years. Excerpts:

With the Coal and Mine ordinance being issued, how soon can we expect commercial coal mining in the country?

Now we want to frame rules that are investor friendly. We are putting them in the public domain. It may take around a week or 10 days. After that, we will frame the rules. Subsequently, I think in another month or two we will identify the blocks and put them up for auction. The first lot of commercial auction will take place around February end or March first week, that is our target.

On what parameter will the coal mines be bid out?

We are taking the stakeholders’ opinion for it, as it should be a win-win situation for all. Our natural resources must fetch some income to the government. At the same time it should be industry friendly also. We will frame the rules while keeping both in mind.

We want to increase our total mining activity so that natural resources which are available in our country are not imported. In order to enable that, we have extended the Prospecting Leases (PL) cum Mining Leases (ML) contracts to the coal sector.

Have foreign players envisaged interest in the commercial coal mining auctions?

There is some more work to be done before that. The earlier laws had limited bid participation to those who have mining activity in India. Now we have changed that. But information about these investor- friendly measures need to be spread through road shows and we will do that after the rules have been formulated.

We have published a discussion paper and sought comments till January 30. Maybe within a week or two, we would finalise the process. The discussion paper, and list of mines to be auctioned, has also been floated. Participants are being asked to specify which mine they would want to bid for in the first tranche of auctions.

Will Coal India price for a certain grade of coal be a parameter in the commercial mining auctions?

As of now, in the entire world, Coal India’s total cost of mining is very reasonable. But I don’t put that as the yardstick. There may be differences from one mine, block or State to another. Our goal is that the substitutable coal import has to stop. Those who are talking about this need to consider the uncertainty ahead for coal after another 25 years.

With the end of captive and end-use mining, do you expect a rise in price per tonne of Indian coal due to more competition?

Surely, because there will be competition. When there is a demand and supply gap, naturally there is an impact. For example, the Karnataka government is lifting coal from Singareni. The Karnataka Chief Minister and Chief Secretary claim that they are losing ₹1,200 crore annually because they have no other option. They have a linkage and they have to lift coal from there. Now the Karnataka government is seeking the option to mine coal themselves. Once the market opens up, and anyone can buy coal from anywhere, we will then have to appoint a Coal Regulator.

What is the status on the proposed Coal Regulator?

The regulator is on our agenda but as of now there is no coal in the open market. Till now, Coal India is our major source. Once commercial mining picks up to our expectation, we will think of that.

What role would Coal India play in a denationalised domestic coal sector?

Today Coal India supplies 85-90 per cent of coal. It will naturally continue to be the major supplier of coal. Recently we also have allotted 16 new blocks and the Ministry of Coal has a system set up of following up the Statutory clearances (Environment and Finance Clearances) required from the Centre.

The commercial mine auctions will help address any shortage of coal. Depending on a single entity is also not good for a country with such a huge population and coal requirement.

How will Coal India unions view this move to de-nationalise the coal sector?

It is our firm belief that Coal India will continue to be a major player. We want to strengthen that. We have no intention to privatise the entire sector. CIL will be there and they have blocks which they can cater for 100 years. We want to see that they achieve 1 billion tonne by 2023-2024.

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Published on January 18, 2020
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