The granting of Navratna status to Coal India Limited ( CIL) has paved ways for the automatic clearance of 17 mining projects worth over Rs 20,000 crore and a capacity addition of over 50 million tonnes of coal.
Alongside, it has also opened gates for CIL's move to develop 26 closed and abandoned mines in the underground (UG) category through joint ventures ( Jvs). The number one steel maker in the world Arcelor-Mittal has already posted a proposal for a JV with CIL for developing the UG mines.
Now, the CIL board can alone take the decision of going ahead on a JV with Arcelor-Mittal for developing the closed mines in the ECL, CCL and BCCL fields each carrying minimum reserves of around 10 million tonnes. CIL's present UG production is 45 million tonnes and wants to raise it to 75 million tonnes by 2011.
CIL is banking on the development of the mines for augmenting coal production to a maximum in the UG category. Of CIL's 318 running UG mines, 80 per cent are loss making with a net loss of around Rs 3084 crore. A few days ago, CIL decided on closing 60 such unremunerative and loss-making mines with losses of over Rs 1000 crore.
“We are relieved and gratified. Coal India will now have greater financial and administrative autonomy. There will also be increased empowerment on overseas joint ventures and acquistion of properties abroad to meet future coal requirements", an elated Coal India chairman Partha S Bhattacharya said on Friday.
Most of the 17 mining projects were hanging fire for sometime as there were hesitant talks on the arranging of funds. CIL was authorised to invest upto Rs 500 crore in any project. The Navratna status has raised the ceiling to a minimum of Rs 1000 crore, the decision to which can solely be taken by the Coal India board.
The Navratna status comes at a time when the country's coal sector, especially Coal India is faced with an acute shortage of around 200 million tonnes of coal by the end of 11th Plan and was therefore planning to import. Coal ministry officials have already gone public pointing out import of around 100 million tonnes.
While the country's requirement by the end of 11th Plan is projected at around 720 million tonnes, CIL has worked out production figures of around 538 million tonnes. The capacity addition planned by CIL after getting the Navratna status is expected to ease the pressure.
Says Bhattacharya, " now we will be in a comfortable position in managing domestic requirements through perking indegenous production and getting coal from abroad." CIL has already requested the country's 73 power stations to import coal in meeting future requirements. Currently 56 power stations are starved off coal and has fallen 'critical'.
CIL's proposed overseas ventures include identifying mine properties for acquisition in Indonesia, South Africa, Australia, Canada and Mozambique. Coal Videsh, the overseas arm of CIL has already done the job of fixing 6 properties in Indonesia and Mozambique. Five merchant bankers have also been engaged in working out modalities for the take overs.
Said Bhattacharya, " the status will give us more empowerment in arriving at decisions on overseas take overs. We will be able to fix responsibilities on a bigger scale though accountability will continue to remain with the ministry".
CIL along with four other PSUs - NTPC, SAIL, RINL and NMDC has formed a SPV International Coal Ventures Limited ( ICVL) and initiated steps through 10 investment bankers in identifying and taking over coal mines and properties in the US, Canada and Indonesia.
