Commercial coal mine auction may be completed this year: Coal Secretary

Auction of reserves selected for commercial mining is likely to be completed by the end of March, and this is likely to end state-owned Coal India's near monopoly in the domestic market.

On the sidelines of the 7th Asian Mining Congress & Exhibition, Coal Secretary Susheel Kumar said the Cabinet Committee on Economic Affairs might take a decision on the commercial mining proposal this month. Allocations would be completed by the end of this financial year. “The Cabinet is likely to take a decision this month. The process would begin after that and it should happen this financial year,” Kumar said.

Previously, the ministry had asked for public comments from industry stakeholders to finalise the modalities of the auction and the allocation methodology.
 

The ministry as well as Coal India, which commands 70 per cent of the market, was the view that opening the coal sector after 40 years of state monopolisation would bring in competitiveness and help improve efficiency.

However, on how many coal blocks have been chosen by the ministry for auction, Kumar said it was yet to be finalised. 

As the country’s power sector continues to reel under pressure owing to lower coal availability, non-power consumers like steel and cement has raised issues related to supply of the commodity.

The world’s largest coal miner is facing pressure from across its consumer portfolios. Kumar said he expected the stocks for the non-power sector to improve by December. It would take a while for coal stocks to normalise for the power sector. “I hope they (power sector) have learnt their lesson and they’ll stock up in the future. There is no shortage (of domestic coal availability) and I don’t see imports going up.”

Coal India Chairman Gopal Singh said the current crisis of coal stocks at thermal power plants was primarily because there was a shortfall in generation from other modes such as nuclear, hydel and solar. The thermal power sector had to make up for the lag.

Priority on safety 

Apart from setting an ambitious coal production target of 1 billion  tonne by 2020, the coal ministry has prioritised improving environmental sustainability and safety standards in the near term.

“Our record (in safety) hasn’t been very good,” Kumar said. “Safety needs to be improved in the entire industry. In most mining companies, there isn’t any problem with funds and technical people. The problem is probably with attitude, lack of training and skill and carelessness.” 

Coal India faced one of its worst mining accidents last year in December. Over 20 miners were killed in the accident at Rajmahal opencast mine. The ministry 

had initiated a detailed plan of action for Coal India workforce to skill up. However, Kumar said the results could have been better.

In 2015, India registered 38 fatalities in coal mining. Fatality was 12 in the US and 10 in Australia. 

Concerned over pollution levels and the need to protect the environment, Kumar said mining companies need to suggest how environment can be protected in the course of mining.