FOREIGN FIRMS CAN MINE AND SELL COAL – ANIL SWARUP
Locally registered foreign firms of India will be allowed to mine and sell coal after commercial mining will be permitted as part of the opening up of the nationalised industry after four decades, as quoted by our Coal Secretary, Anil Swarup.
To end a chronic coal shortage that cripples power plants and curb the country’s imports of the fuel, the Narendra Modi government will also spend about $1 billion by 2019 to buy railway wagons and transport coal from remote mines. This decision will not only help to ramp up output from India’s huge reserves – the world’s fifth biggest, but it will also open the doors to global giants like Rio Tinto and BHP Billiton to invest.
“Any company registered in India can bid… So a foreign company registered in India can also bid, provided they fulfil other conditions.” Swarup said.
As of now, only power, steel and cement companies can mine coal for their own consumption. Commercial mining in India is dominated by state-owned Coal India Ltd.
Opening up the industry will increase private coal production to about 400 million tonnes by 2019 from less than 50 million tonnes last year, Swarup said.
Coal India is the world’s largest miner of the fuel but its unionised workforce resists mechanisation fearing job losses. The resulting inefficiencies are partly responsible for years of missed output targets and India’s coal imports.
But Swarup said the firm will beat its production target of 507 million tonnes in the fiscal year through March due to new mine output and environmental clearances. Output has lagged targets over the last six years for which data is available.
He sought to allay concerns over labour unions, which plan a one-day strike against sector reforms and the planned sale of a 10 percent Coal India stake.
“Our attempt is to convey our feelings to them that under no circumstances will the interest of Coal India be adversely affected by the decisions of the government,” Swarup said.
Anil showed his enthusiasm about the selection of Sutirtha Bhattacharya, Chairman of India’s second largest coal producer, as the next head of Coal India. Though much smaller, Bhattacharya’s Singareni Collieries has been able to surpass its output target every year.