Naveen Jindal, Chairman, Jindal Steel and Power Ltd, on Wednesday said that the government should not be a “hoarder” of mines by putting only a few blocks on auction at a time, as this could create an artificial scarcity.

Such “artificial scarcity” leads to competition and pushes entrepreneurs to pay huge premiums which might later become “unsustainable.

“Whether it is coal blocks or iron ore blocks, the government cannot be a hoarder, the government has to take out a lot of these blocks...what are these for? Why should the government (whether State or Central) think that it will only bring few blocks at a time because it wants to maximise on the premiums and the industrialists think there is so much of competition......when the government creates this artificial scarcity, people end up paying huge premiums. We have seen this happen in coal and iron ore and every other mineral and then they become unsustainable,” Jindal said at the Minerals, Mining and Metals e-Conclave organised by the Bengal Chamber of Commerce and Industry here today.

The government had recently opened up the coal sector to commercial mining. It had offered as many as 38 coal mines for commercial mining auction. However, it received interest only for around 19 mines, where some of the highest bids were received from companies like Aditya Birla Group, Adani Group, Vedanta, JSPL amongst others.

Applauding the government’s move to open up the coal sector to commercial mining, Jindal said it was a “bold move”, though the task was not an easy one.

‘Ease processes’

He also called for the easing of processes to facilitate mining and stressed on the need for introducing single window clearances. There is also a need for clarity on rules and regulations.

“It takes so much time to get clearances; there should be a single window clearance system for forest, environmental and other issues. This is something very important,” he pointed out.

Talking about coal availability, he said, despite having so many reserves India happens to be the second biggest importer of coal in the world. “While we import close to $20 billion of coal, however, in terms of calorific value the imports are far higher at around 35-40 per cent,” he said.

However, the steps taken by the government and the Coal Ministry have helped improve coal availability, and over the next 5-10 years there would be no need for India to import coal other than some amount of coking coal, he added.

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