No-go area issue to 'least' impact CIL production

A clear picture of the impact of “no-go areas” on Coal India’s (CIL’s) production is likely to emerge after a committee of secretaries examining the issue submits its report.

A panel of secretaries under Principal Secretary to the Prime Minister’s Office, TKA Nair, is examining the issue. “Only a preliminary exercise to identify the no-go areas has been done. The government will ensure that CIL’s coal production in future is least implicated,” a top CIL official said. No-go areas are stretches with rich forest cover and biodiversity where forest land diversion applications are not entertained.

CIL’s initial public offering (IPO) — the biggest float in corporate history — is slated to open on Monday. At Rs 225-Rs 245 a share, with no domestic peer listed on the stock markets, the issue will be a litmus test of sorts, and help the government raise about 37.8 per cent of its asset sale target.

The Ministry of Environment and Forests (MoEF) had in July agreed to review its decision on “no-go area” classification. The decision was taken after a meeting between Finance Minister Pranab Mukherjee, Environment Minister Jairam Ramesh and Coal Minister Sriprakash Jaiswal.

“The entire matter will be settled after the IPO in a mutually beneficial manner. CIL has access to all reserves, but the discussions to determine what exactly is no-go will resume only after the issue,” the official said. “The environment ministry had earlier wanted around 44 per cent of CIL’s mining area to come under the no-go jurisdiction. However, CIL executives say the final list of no-go areas will bring down the impact substantially. MoEF has agreed to re-survey the areas and changes are likely to be made,” the official said.

MoEF’s stand had raised doubts about the success of CIL’s issue. The coal ministry had earlier complained about the environment ministry’s clearance process. “The no-go area is provisional. The entire exercise of carving out no-go areas started when the coal ministry approached the environment ministry for faster clearances. The clearances are supposed to take 100 days, but stretch to 300 days. The entire process requires streamlining,” the official added.

For instance, the existing operations of CIL are in less dense areas where production can be speeded up. CIL operates 471 mines in 21 coalfields across eight states in India – Chhattisgarh, West Bengal, Jharkhand, Maharashtra, Madhya Pradesh, Orissa, Assam and Uttar Pradesh.

For 2010-11, the coal requirement for power utilities is estimated at 440 million tonnes. Availability from CIL and other sources is expected at 388 million tonnes. MoEF had declared 40 captive coal blocks, of the 219 allocated earlier this year, as “no-go areas,” blocking substantial amounts for user industries.