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Govt to open coal mining to private firms
Aiming to make India energy self-sufficient, the Indian government is preparing to open up commercial coal mining to private companies for first time in four decades.
New Delhi : Aiming to make India energy self-sufficient, the Indian government is preparing to open up commercial coal mining to private companies for first time in four decades.
Quoting top official Anil Swarup on Friday, the agency said that the government has identified mines it plans to auction, and is now finalising other terms such as eligibility criteria for companies to take part and whether and how to set up revenue sharing.
He said a plan should be ready in the 2-3 months, setting a clear timeline on a plan that has previously only been vaguely marked out.
India has an ambitious plan to double its coal production to 1.5 billion tonnes a year by 2020, as part of Prime Minister Narendra Modi's push to bring power to those who live without electricity, and give a boost to manufacturing.
It would also support the government's efforts to develop eastern parts of the country, which are resource-rich and hold most of India's coal reserves but have lagged the western states in development. State-owned Coal India is on track to produce 1 billion tonnes a year by the end of this decade, and India is counting on private firms to produce the remaining 500 million tones - which may prove a tough target to achieve. As of now, only Coal India and a small government-owned company are allowed to mine and sell coal in India.
The move is likely to attract coal block bids from Indian conglomerates such as the Adani Group and GVK, but the government may find it harder to lure big multinational miners such as Rio Tinto, BHP Billiton, Anglo American and Peabody Energy. Rio Tinto did not respond to requests for comment. Swarup was handpicked by Modi to lead a turnaround in the coal sector soon after the prime minister came to power in 2014.
Under Swarup's watch, Coal India has seen record production growth, and the government auctioned off a series of coal blocks successfully. Coal imports fell for a sixth straight month in December.
Until last year, India spent around $16 billion a year importing foreign coal, even though it sits on the world's fifth-biggest reserves of more than 300 billion tonnes.