Brushing off fears that commercial mining in coal sector may erode its monopoly and profitability, Coal India (CIL) today said it was geared up to face the challenge and would welcome any such move to open up the sector for private investment.
The government is considering re-introduction of a Bill to amend the existing Act governing coal mining for allowing private sector in the space and is likely to convene a meeting of a ministerial panel soon.
"The proposal if approved will only strengthen us removing whatever inefficiencies we have as CIL will have to face competition from other players. We are well prepared for it and are not scared of losing our monopoly," the company's Chairman NC Jha said.
Power, steel sectors have already been opened up for private sector and the PSUs are performing well there, he said adding, under such circumstances any such move to bring about reforms in the sector would benefit CIL.
"With the market getting competitive there would be no restrictions on us and we can sell the coal at competitive rates, increasing prices too if required," Jha said.
The government has already constituted a Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee, to consider re-introduction of a Bill to amend the Coal Mines (Nationalisation) Act, 1973.
The Act governing the sector allows only PSUs to undertake mining besides permitting private firms to extract coal for captive use.
The Bill to amend the Act to allow private participation has been pending in Parliament for the last 10 years for want of political consensus amid opposition by trade unions. Earlier, Coal Minister Jaiswal had said the government, as part of the energy sector reforms, is trying to evolve a consensus on commercial coal mining to promote development of the sector.
After nationalisation of the coal mines in 1973, the mining in the sector is done exclusively by the public sector companies, with CIL accounting for over 82% of the production.
The private sector is allowed coal mining for meeting their captive requirements in sectors like power, steel and cement etc.
The need to liberalise the sector was also felt in the wake of widening demand-supply gap of the dry-fuel.
According to government estimates, India faces a supply shortage of 142 million tonnes of coal, with the requirement of 696 million tonne in the current financial year.
In the next 20 years, import dependence can go up to 55% of the demand, as per Coal Ministry estimates.
