In a bid to plug the demand and supply gap of coal in the country, the government is considering a proposal to open coal mining to the private sector.
“We are thinking on it. The government is not averse to any proposal, whether it is for privatisation or for any other reform,” said Union Coal Minister Shriprakash Jaiswal. Currently, state-owned companies like Coal India Ltd (CIL) are allowed to mine the dry fuel in India. Private companies are allowed to mine only for their captive consumption.
A Bill in this regard, introduced in the Rajya Sabha by the National Democratic Alliance (NDA) government in 2000, is still pending.
“As soon as the bill is finalised, it will be introduced in Parliament,” the minister said. The bill is likely to be revived by the government after the Union Budget is presented next month.
The move is seen as the first step in the new government’s bid to speed coal sector reforms in the country.
Earlier this month, President Pratibha Patil, while addressing the first session of Parliament, had said the “blueprint” for coal sector reforms had been prepared. Allowing private companies to mine coal would benefit both domestic as well as overseas firms like Gujarat NRE and Rio Tinto. It will also reduce India’s dependence on coal imports to meet domestic requirement.
Reduced coal availability is a major constraint in utilising full potential of India’s power generation capacity.
India produces around 450 million tonnes of coal annually, around 50 million tonnes less than the domestic requirement. Coal requirement is expected to go up to 1,000 million tonnes by 2030, according to the Integrated Energy Policy.