Sunday, May 22, 2022

Coal India to offer another 110 abandoned coal mines on PPP basis to private sector

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  • Coal India will put up its own abandoned/discontinued coal mines on offer for the private sector to ramp up India’s coal production, said the minister 
  • The CIL CMD said that the scheme for inviting the private sector to develop abandoned CIL mines has been launched, keeping in mind that the government is looking at ways to increase the participation of the private sector in the economy 

New Delhi: Announcing the launch of 20 abandoned/closed coal mines of Coal India Ltd (CIL) for coal mining by the private sector on revenue-sharing basis, Union Minister for Coal Pralhad Joshi said on Friday that around 110 more abandoned coal mines will be put forth by the state-run miner on Public Private Partnership (PPP) basis soon. “PSUs face several constraints in terms of the way they operate, which is not the case with the private sector. Which is why it has been decided that along with commercial mining, Coal India will put up its own abandoned/discontinued coal mines on offer for the private sector to ramp up India’s coal production.”

‘Increase in power demand putting too much pressure on CIL’

Referring to the current power crisis caused due to a spike in power demand, the minister said that there is immense pressure on the coal PSU to increase coal production. While pointing out that India has ample reserves of thermal coal, the minister said that it is imperative for India to become self-sufficient in coal production. “There is no reason why India should continue to import thermal coal,” said the minister.

“The government wants India to become ‘Atmanirbhar’ in coal production. And that is the reason these abandoned CIL mines have been identified and put up on offer for the private sector,” said Joshi.

CIL to offer coal mines on PPP basis: Chairman

Explaining the rationale behind offering abandoned coal mines to the private sector, Coal India Chairman Pramod Agrawal said, “Around 200 coal mines have gone out of production over the last few years. And a lot of these mines are not out of production because they were out of coal. Some of them became economically unviable for Coal India, while in some mines, it was not possible to mine coal out using the technology that was available at the time. Therefore, they were abandoned.”

The CIL CMD said that the scheme for inviting the private sector to develop these abandoned mines has been launched, keeping in mind that the government is looking at ways to increase the participation of the private sector in the economy. “Since the government is now trying to increase the participation of the private sector in the economy and seek private investment to bring in more efficiency, Coal India thought of launching this scheme,” said Agrawal.

“Coal India has been trying to increase private sector participation in its contracts over the last few years. We have already increased the tenure of our contracts from 2-3 years to 6-7 years. We also decided to offer coal mines on MDO mode to the private sector for a period of 20-25 years. Around five coal mines have already been awarded under the regime. And it is expected that these mines will produce around 100 MT of coal in the years to come,” he said.

However, since the MDO model was not particularly lucrative to the private sector, a new scheme was worked out for offering mines on PPP basis to the private sector on revenue-sharing basis, said Agrawal. He added that it is essential for both the public sector and the private sector to contribute towards increasing India’s coal production.

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