Coal India Ltd has been targeted to produce 1,000 million tonnes of coal by 2019-20, which is about twice its current production level. The expected growth is to come from future projects the public sector entity has identified.
Announcing this in Parliament recently, Minister of State (Independent Charge) for Power, Coal and New and Renewable Energy (Independent Charge) Piyush Goyal said that the envisaged growth would be possible via both brownfield and greenfield projects.
To achieve its target, CIL is banking on timely completion of new railway infrastructure projects, faster environment and forest clearances, completion of rehabilitation and resettlement schemes with the help of state governments, improvement in law and order situation, and technology improvement in mining and related infrastructure.
Total plan outlay
The total plan outlay for 2014-15 for the coal and lignite sector, including the plan outlay of public sector undertakings, is Rs. 12,561 crore.
A majority of the outlay is accounted for by public sector coal entities, mainly Coal India Ltd (Rs. 5,225 crore), Singareni Collieries Company Ltd Rs. 3,850 crore) and Neyveli Lignite Corporation Ltd (Rs. 2,936 crore). The outlay for the plan schemes of the Ministry of Coal is Rs. 550 crore. There is no foreign assistance in the ministry’s budget.
The all-India coal production target for 2014-15 has been fixed at 630.25 million tonnes. During the first half of the current year (April-October), the government has achieved a total production of 314 million tonnes.
Cancellation of coal blocks
The Indian government allocated a total of 218 coal blocks to “eligible public and private sector companies” during the 1993-2011 period in pursuance of Section 3 of the Coal Mines (Nationalisation) Act, 1973. Out of these 218 blocks, 40 coal blocks have come under production.
Coal blocks for generation of power were allocated for end-use projects proposed to be set up as well as for existing end-use projects. In fact, the production from the coal blocks was expected to be synchronised with the commissioning of end-use projects.
However, three months ago, the Supreme Court cancelled the allocation of 204 coal blocks out of 218 coal blocks as “arbitrary and illegal.” The apex court’s directive arose from a writ petition challenging the allocation of coal blocks. The 14 blocks that were not cancelled included Tasra coal block of Steel Authority of India Ltd, Pakri Barwadih coal block of NTPC Ltd and 12 coal blocks allocated for ultra mega power projects.
Significantly, cancellation of 42 coal blocks (37 under production and five likely to come under production), will take effect from March 31, 2015.
The Supreme Court also imposed an additional levy of rS. 295 per tonne on the total coal extracted since the commencement of production from the coal mines, to be deposited with the government within the prescribed time period.
The cancellation of coal blocks will have financial implications with the total amount of additional levy payable by the allocatees estimated at `10,494.36 crore.
For the management and reallocation of cancelled coal blocks, the Government of India promulgated the Coal Mines (Special Provisions) Ordinance, 2014 on October 21, 2014, to ensure smooth transfer of rights, titles and interests in the mines and blocks along with land and other associated mining infrastructure to the new allottees who would be selected through auction or allotment to government company.
The 218 coal blocks allocated between 1993 and 2011 belonged to coking and non-coking categories with the quality of coal ranging from A to G grade. The category (grade) of coal in a block can be ascertained only after a detailed exploration is carried out. Further, a block may contain coal of more than one grade. However, complete data of grades of coal in respect of all the cancelled coal blocks is not available. As of October 2014, 325.50 million tonnes (provisional) of coal has been mined from 37 producing coal mines which have since been cancelled.