State-owned Coal India Ltd (CIL) is set to lose production of 40,000 tonnes of coal a day, following an order from the Jharkhand government to close 22 mines operated by its subsidiary, Bharat Coking Coal Ltd (BCCL).
The Jharkhand State Pollution Control Board passed the order on Wednesday, alleging BCCL of running these mines without proper environmental clearances.
Shares in CIL on Thursday closed 0.1 per cent higher at Rs 374.3 on the Bombay Stock Exchange (BSE). The stock has risen 6.5 per cent since its listing on November 4, compared to a 22 per cent fall in the BSE Sensitive Index, or Sensex.
CIL produces 431 million tonnes (mt) of coal annually, accounting for a little more than 80 per cent of India’s coal production. BCCL accounts for seven per cent of CIL’s production capacity of 461 mt. The Jharkhand government’s order covers 22 of the 80 mines operated by BCCL.
Denying any “major” impact on production, CIL said it was yet to get the closure order. “No mines have been closed so far. There is not likely to be a major impact on production,” CIL chairman N C Jha told Business Standard.
“In the worst case, if the Jharkhand government insists, production to the tune of 40,000 tonnes produced from these 22 mines will be lost daily. This translates to 12 mt annually,” he said.
Meanwhile, a top BCCL official said the firm had approached the Jharkhand high court, seeking relief.
“The order has not affected the production for now. These mines are still under operation,” said P P Gupta, general manager, environment, BCCL.
Jha said the mines facing closure had been in operation for more than 100 years. According to him, these mines do not require new environment clearances from the state government, as these were not new projects. “BCCL had, however, applied for ‘Consent to Operate’ from the state government, which has probably been denied. Fresh environment clearance was required for renewal of lease in some of these mines,” Jha said.
The Union environment ministry had earlier divided the 80 mines operated by BCCL in 17 clusters, in view of their proximity to each other. While the terms of reference detailing the structure of these projects have been issued by the ministry for 16 clusters, the same for the 17th cluster is yet to be released.
“We are taking up the matter with the environment ministry, pending a decision of the high court. The ministry will write a letter to the Jharkhand government on the issue soon,” Jha said.
CIL’s production from the 471 mines it operates remained flat at 431 mt in 2010-11. It had last week dethroned Reliance Industries Ltd (RIL) to emerge as the country's most valued firm, with a market cap of 2,49,685 crore. The coal producer later slipped to the third slot, behind RIL and state-owned Oil and Natural Gas Corp.
