KOLKATA (miningweekly.com) – The Indian government has cracked the whip on State-miner Coal India Limited (CIL), directing it to either step up exploration for and production of coal at blocks allotted to it, or see the assets put up for auction.
Having liberalised coal mining and with auctions of coal blocks exclusively for private miners lined up, the Coal Ministry has come down heavily on the State miner for delays in exploring and operationalising 110 coal blocks with estimated reserves of 40-billion tons, allotted to it in 2011.
The Ministry has asked CIL to prepare and submit an action plan with definitive timelines to bring these assets into production and if, on review, the timelines are found to be unacceptable in terms of gestation periods, the blocks will be taken back and put up for auction for bidding by private miners.
According to sources in the Ministry, the government goal is to achieve total domestic coal production of one-billion tons a year by 2024. Now that private miners can enter coal mining without end-use restrictions and with a free pricing regime, it does not matter where the incremental production comes from and delays in monetisation of assets will not be accepted.
Further, the Central Mine Planning and Design Institute has been directed to prepare a detailed analysis of all the coal blocks allotted to CIL. This report will enable the Ministry to explore the possibility of combining the greenfield coal blocks to increase acreage and offer more attractive larger assets to private miners if CIL is unable to give an acceptable development timeframe, the sources say.