KOLKATA (miningweekly.com) – India’s Coal Ministry is ready to unveil a comprehensive policy on the disposal of washery rejects, middlings and coal surplus by private miners in a bid to streamline the process of attracting private sector investment in adding value to the dry fuel.

The Coal Ministry will convene a consultation meeting with various industry stakeholders on August 30, to assist in finalising the draft policy.

The washery policy is part of the Ministry’s efforts to shift its focus from production targets to “quality production”, add another 112-million tons a year of washed coal capacity and invite private foreign investments into the sector, a Ministry official said.

The policy will provide miners with leeway regarding disposing of surplus production. This will be significant, as, currently, all production from captive mines allocated through the auction route has to be used for the specified end use.

The window for disposing of extra production from washeries is also expected to check for the illegal sale of good quality coal under the garb of washery rejects, which is often resorted to when production from a specific block is in excess of end-use plant’s demand.

The washery policy will also be in line with the Standard Coal Mines Development and Production Agreement, which every successful bidder at the coal block auctions is mandated to sign with the government.

The Ministry further views the policy as a necessity, against the backdrop of inviting foreign investors to set up coal washing plants under government's built-operate-transfer model contract, the official said.

Earlier in the year, Poland, one of the largest producers of coking coal, had offered to construct a 2.7-million-ton-a-year coal washing plant and provide technical and financial assistance in expanding Indian coal washing capacity under a government-to-government dispensation.

As for Coal India Limited, it is in the process of constructing 15 new washeries over the next three years, of which nine would be for non-coking coal, with an aggregate capacity of 95-million tons a year, and another six for coking coal, with a capacity of 19-million tons a year.

At the same time, resource, logistics and energy major Adani Group has floated a wholly owned subsidiary, Korba Clean Coal Private, to exclusively focus on investing in washeries across the country.

The coal washery and disposal policy is also an imperative against the backdrop of a directive of the Environment Ministry effective since June 2016.

Under this directive, it is required that all coal supplies to power plants located beyond 500 km from pithead be washed and that the fuel have a minimum quarterly average gross calorific value of 4 000 kcal/kg.

Another target that has been set for 2017/18 is that private and government miners only be allowed to market crushed and washed coal.