Govt considering to have larger blocks to attract investments: Minister Pralhad Joshi

Twesh Mishra New Delhi | Updated on October 15, 2019 Published on October 15, 2019

Coal and Mines Minister Pralhad Joshi

The Ministry of Coal is looking at ways to attract foreign participation in the coal mining sector. One of the options being considered is carving out larger coal blocks to meet the requirements of foreign investors, Coal and Mines Minister Pralhad Joshi said.

Speaking at the third India Energy Forum by CERAWeek, Joshi said, “We have opened up the coal mining sector for Foreign Direct Investment under the automatic route. We are formulating various policies to attract foreign investors and private sector within the country.”

Policy soon

The Ministry of Coal has been evaluating a slew of measures of attract more investment in the coal mining sector. This includes commercial coal mining, allowing auction of mines with less than three bidders, and permitting the sale of 25 per cent coal committed production in the open market.

“The current size of coal blocks is very small today, and to attract global investors, we need bigger blocks. We are deliberating all such such things, and within a fortnight or a month, we will come out with a policy for the same,” Joshi said.

“The FDI proposal has been approved and on track. Now within the Coal Ministry we need to make some changes to attract investors...A proposal for the same which is yet to be finalised, and needs the approval of the Cabinet and the Prime Minister,” Joshi said.

Speaking to reporters at the sidelines of the event, he said that a Cabinet note may not be needed for this change, and that the Coal Ministry is acting on industry suggestions to boost commercial coal mining.

Poor response

The recent round of coal mine auctions saw a poor response with just 6 of the 27 blocks on offer getting adequate interest to be bid out. One of the reasons for this disinterest could be expectations from commercial coal mining, the auctions for which are expected to begin from December 2019.

India’s energy needs

Commenting on the way ahead for India’s energy demand, Minister for Petroleum and Natural Gas Dharmendra Pradhan said, “Given its huge energy appetite, India will be the key driver of global energy demand in the coming decades. In fact, it will experience the fastest growth in energy consumption among all large economies. To meet this demand, India would need a healthy mix of all commercially viable energy sources.”

“The share of renewables in electricity capacity has significantly gone up to 22 per cent from around 10 per cent in 2014-2015. Secondly, the ethanol-blending percentage has risen from 0.67 per cent in 2012-2013 to close to 6 per cent now. Finally, more than 95 per cent households now have access to LPG, making their kitchens smoke-free,” Pradhan added.

However, India will remain dependent on coal for a large chunk of power generation. Piyush Goyal, Minister of Railways and Commerce and Industry, said, “All over the world, coal was the primary driver of energy needs, particularly low-cost energy, during the development cycle of different nations. The United States, Europe, China, Russia, all have used coal extensively to meet their development abilities. They wouldn’t have reached where they are today, had they not used that much coal. Even today, our per capita consumption of coal is probably one-seventh or one-tenth of what it is today in the US.”

“Even in absolute terms, they (US) consumes nearly twice as much coal as India consumes even today,” he added.

“This debate about coal needs to be restated. It doesn’t matter whether you produce energy from coal, gas or petroleum, one should only be concerned about the emissions. And if you are able to reduce emissions while producing electricity from coal, then coal is as good as anything,” RK Singh, Minister of State (Independent Charge) of Power and New and Renewable Energy, said. “We have laid down very stringent norms for emissions from power plants,” Singh added.

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Published on October 15, 2019
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