Policy

Govt expects ramp-up in coal output from captive blocks

Vishwanath Kulkarni New Delhi | Updated on July 12, 2011

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The Coal Ministry expects an increase in output from captive coal blocks during the current fiscal, following its intensified drive against companies not commencing production from these reserves.

The output from captive coal blocks is expected to be in the range of 55 to 60 million tonnes in 2011-12, as companies owning such blocks are seen expediting their production plans, official sources said.

Production from captive coal blocks has been stagnant in the last two years, in line with the country's total output.

Apart from the delay on the companies' part in developing the allocated blocks, issues related to environment and forest clearances, land acquisition, bureaucratic hindrances with respect to grant of mining leases at the State level have contributed to the tardy output from the captive blocks.

Since 1993, the Coal Ministry has allocated a total of 214 captive blocks to some 307 companies in sectors such as power, steel and cement. The majority of these allocations were done after 2006. According to initial projections, output from captive coal blocks was supposed to have touched 100 million tonnes by 2012, sources said. However, the actual output has belied the initial expectations.

With the domestic production, including that of public-sector Coal India Ltd, unable to keep pace with the rising demand, the Ministry recently started a drive against companies that have delayed development of coal blocks.

The Government has already de-allocated about 12 coal blocks from companies such as NTPC, Damodar Valley Corporation, Jharkhand State Electricity Board, Andhra Pradesh Power Generation Corporation and private players such as Bhatia International and Shree Baidyanath Ayurved Bhavan. Also some 29 entities were warned to bring their coal blocks into production at the earliest.

The sources said following the Ministry's drive to cancel the idle blocks, companies have started expediting their production plans.

“Several of them have already made initial investments in developing the blocks, which they don't want to go waste,” they added.

Published on June 25, 2011

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