| "Coal India Ltd has separately submitted a proposal for setting up CVL to mine and acquire coal properties abroad. A draft note for the CCEA was prepared and views of ministries concerned were obtained thereon. The Ministry of Finance has not supported this proposal," the coal ministry said in a note. |
| "Their (finance ministry's) contention is that the real bottleneck is the legal and structural rigidity in the coal sector. Setting up of CVL will in no way address these problems," the note said. |
| According to the note, the finance ministry also pointed out that domestic reserves were adequate to take care of most of the country's needs, though there were issues of quality and price of the indigenous coal. |
| "Private and public sector users could be encouraged to acquire interests overseas by way of backward linkage rather than a state-owned company being set up as the latter is likely to result in high cost operations," the note quoted the finance ministry. |
| "CIL has been requested to suggest alternative ways," it said. |
| The coal ministry said CIL was making efforts to explore opportunities for securing coal properties abroad by holding talks with relevant government agencies and companies in Australia, Indonesia, Canada, Mozambique and Zimbabwe, it said |
| "Besides, CIL is also planning to hold roadshows in some of the above-stated countries to identify suitable companies for partnership as an entry strategy," a senior coal ministry official said. |
| "Certain opportunities have been identified for which due diligence will be undertaken. A panel of investment bankers has been created to assist CIL for scouting, identification and evaluation of opportunities abroad," he said. |
| Even the Committee of Public Undertakings in its recent report had observed that setting up CVL as an entity to deal exclusively with the overseas coal acquisition projects will definitely impart cutting edge over the present scattered arrangement. |
| The coal ministry has also allowed Central Mine Planning and Design Institute Ltd (CMPDIL) to provide consultancy services to captive coal block allocatees as and when they approach the Institute. |
| However, CMPDIL is already providing consultancy to captive block allocatees, including Tata Steel, Chhattisgarh Mineral Development Corporation Ltd, NTPC Ltd, NALCO, Rashtriya Ispat Nigam Ltd and Neyveli Lignite Corporation. |
| Since most of the captive coal blocks holders would require mining expertise to extract coal from the seams, CMPDIL could extend its consultancy to them in a big way. |
Explore Business Standard