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Increased imports may be necessary in India

A RECENT government proposal indicates that Coal India may be ordered to increase thermal coal im...

Justin Niessner

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The figure represented a substantial increase in Indian coal imports this year which previous media speculation predicted would total about 30Mt.

The news comes as the industry’s administrative bureaucracy stifles initiatives to boost domestic output through coal block auctioning and ramped up production efforts by Coal India.

The proposal to lift imports was reportedly put under consideration by the coal ministry while pending environmental clearances blocked future output and industry regulators said coal block auctioning was still 2-3 months away.

According to reports by The Hindu, the coal ministry is expected to make a call regarding the proposed import increase this month even as forestry and environmental hang-ups stall production of 70Mt of Coal India resources.

“A total of 50 cases of stage 2 clearances are pending across six subsidiaries of Coal India,”The Hindu quoted a coal ministry official as saying.

“Out of these, 31 cases are pending with different state governments and another 19 cases are stuck at Ministry of Environment and Forests.”

Coal India subsidiary South Eastern Coalfields has 30 forestry approvals pending, 18 with state governments and 12 with the environmental ministry.

The report found this miner alone to be blocked from more than 46Mt of coal due to the red tape.

Competitive coal block auctioning intended to assist Coal India in its lone stewardship of the country’s enormous coal industry has also been slow to materialize.

Indian newspaper The Pioneer noted that the comptroller and auditor general found fault with the current coal block auctioning policy and a new process of demarcating blocks to various sectors would be applied.

In April, The Indian Express said cement and steel companies would be able to bid on licenses in open auctions – but power companies would participate through “competitive tariff-based bidding”

Since a critique of the policy by the auditor general, the coal ministry has mooted opening competitive bidding to all public and private companies.

“In the next two-three months we are going to start the process of auctioning coal blocks,”The Pioneer quoted the coal ministry as saying.

“All the coal blocks have been demarcated. We have identified how many coal blocks would go to [public sector undertakings], the state government and the private companies.”

When a leaked government audit suggested Coal India squandered more than $US200 billion by allocating coal blocks instead of allowing competitive bidding, a scandal dubbed “coalgate” by local media enshrouded Prime Minister Manmohan Singh and accelerated the push for coal block auctioning.

The government has so far listed 54 coal blocks around the country for auctioning.

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