KOLKATA (miningweekly.com) - The international consultant appointed to advise on the restructuring of Indian major Coal India Limited (CIL) would not be mandated to split the corporate structure of the company.

The Coal Ministry said in a statement that it did not favor changing the holding company structure of CIL and noted that the international consultant, which would likely be appointed within the next two months, would be allowed to investigate all aspects of restructuring the company, except splitting up CIL with the intention of enabling the coal miner to achieve greater long-term sustainability and productivity.

As reported by Mining Weekly Online in January, India’s Coal Ministry had sought proposals from leading international consultants to prepare a restructuring plan to see to the adoption of corporate organisational principles and to prepare a roadmap for greater competitiveness for CIL to meet the rising domestic demand for coal.

However, against the backdrop of several recommendations from government bodies, including India’s Planning Commission, the appointment of a consultant was seen as a step in an undesired direction, that of breaking up CIL into smaller mining entities.

The Planning Commission, in a strategy paper, recommended that CIL would be better served if its subsidiaries were to be spun-off as separate government companies, which would encourage them to develop their own strategies for coal development, including joint ventures and overseas acquisitions.

The Coal Ministry has clarified that while the chosen consultant would be given the freedom to study and determine the merits in all previous government recommendations pertaining to CIL, spinning off CIL subsidiaries would not be within the ambit of the consultant's mandate.

CIL, the world’s largest coal miner, producing 435-million tons a year, accounted for over 82% of domestic coal supplies, operated through seven wholly owned mining subsidiaries, including Eastern Coalfields, Bharat Coking Coal, Central Coalfields, South Eastern Coalfields, Western Coalfields, Northern Coalfields and Mahanadi Coalfields, along with an in-house consultancy, a subsidiary of the Central Mine Planning & Design Institute.