KOLKATA (miningweekly.com) - The Indian Parliament’s Standing Committee on Coal and Steel has passed strictures on Indian major Coal India Limited (CIL) for failing to use ad hoc funds set aside for overseas asset acquisitions during the last two financial years.

Expressing concern over the idle funds, the committee's report said that the coal miner, which accounted for over 80% of domestic supplies, had made an ad hoc provision of  $1.1-billion in 2011/12 and $924-million in 2012/13, but had not been able to use the funds to acquire any assets abroad.

Replying in Parliament, Junior Coal Minister Pratik Prakashbapu Patil said the CIL board had set up a subcommittee of directors, called the Foreign Acquisition Committee, to monitor progress on foreign investment proposals.

However, despite its inability to spend money on overseas assets, CIL had in the current year earmarked $6.47-billion for foreign investments until 2017, of which the miner hoped to spend $4.62-billion on assets in the US, Indonesia, Australia, South Africa and Columbia.

Spending the balance of the funds depended on progress on CIL’s project to develop two coal blocks in the Tete province, in Mozambique, which included infrastructure, logistics and railway construction linked to the coal blocks.

Anger Over Unused Coal Blocks and Poor Oversight

The Parliamentary committee had also come down heavily on the government’s allocation of coal blocks between 1993 and 2010, and recommended that all blocks that had not gone into production should be taken back.

“Out of the 195 coal blocks with estimated reserves of 44.23-billion tons, only 30 blocks have started production. Out of the 160 captive coal blocks allotted during 2004/08 only two have started production,” the committee said in its report.

Worse, according to the report, the government had no estimate of the value of coal extracted from the mines that had been operationalised, and it demanded an effective mechanism to monitor and value the amount of coal extracted from coal blocks allotted to private investors.

It also demanded a list of companies that had been allotted coal blocks without any end-use projects.

The country’s Criminal Bureau of Investigation was currently investigating, under the supervision of the Supreme Court, the government allocation of coal blocks to private companies. Commonly referred to as “Coalgate’ by opposition parties, the issue had held up the functioning of the Indian Parliament over the past few days.