KOLKATA (miningweekly.com) - India’s Coal Ministry has set a captive coal production target of 68-million tonnes during 2014/15 from all blocks allocated to various companies for own fuel use.

According to a Coal Ministry circular, “the production target has been set and all allocated coal blocks for captive consumption were expected to achieve the target to keep in check imports of the dry fuel”.

The circular followed a review meeting between the Ministry and various companies that had been allocated coal blocks to review the progress made in getting the blocks into production. The companies represented at the meeting included Steel Authority of India Limited (SAIL), the country’s largest steel producer, Jindal Steel & Power Limited (JSPL), Sasan Power Limited and Jaiprakash Associates, among others.

According to a background note prepared for the meeting, the Ministry expressed concern over several blocks which had already gone into production but were yet to achieve peak rated capacity.

These included 21 blocks such as the Tasra coal blocks of SAIL, the Moher and Amlori blocks allocated to Sasan Power Limited and Damodar Valley Corporation's Barjore block.

The Ministry expected that the coal blocks scheduled to go into production in the current fiscal would achieve peak capacity, meaning 52-million tonnes of incremental coal production would be possible.

Of the total 328 coal blocks identified for allocation for captive consumption of user industries, the government had allotted 218 blocks. However, 80 blocks were subsequently de-allocated following failure to achieve milestones laid down by the government.

Meanwhile, in a related development, the Indian government has revived moves to open up coal mining to private companies, including allowing captive coal miners to sell part of their production in the market.

However, Coal Ministry officials conceded that this would be in the long term as it would require major legislation and a reversal of the policy that restricted coal mining in the country exclusively to government-owned companies.

It would require amendment of the Coal Mines Nationalisation Act.

The officials said that opening up of the coal sector would be initiated after the planned disinvestment of government equity holding in Coal India Limited (CIL) and the first step would be to hold talks with trade unions operating in the coal sector.

Trade unions operating in CIL have already announced opposition to disinvestment of government holding as well as plans to open up coal mining for private investment.

Officials said that the protracted process of inviting private investment in coal mining was illustrated by the fact that moves in this direction were first made in 2001 when an amendment was moved in Parliament, but that no government had been successful in moving it forward since.