Coal news and updates

The government could be looking at the long-standing demand from policy planners and economists to reform coal mining by letting in private competition as supply shortage hobbles power sector growth and formulate a National Energy Policy for an integrated approach for tapping a basket of resources to ensure India's energy security. 

 

"Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner," President Pranab Mukherjee told a joint session of Parliament on Monday as a hint of the government's intent. 

 

At the same time, he clearly stated the government's intent of laying down "clear and transparent policies on allocation of critical natural resources such as coal, minerals and spectrum" to check corruption. 

 

"In the recent past, serious concerns have been expressed regarding use of discretionary powers in allocation of our precious natural resources," the president said in an obvious reference to the 2G spectrum allocation scam and Coalgate — first reported by TOI on March 22, 2012 — that rocked the UPA-II government. 

 

There was no elaboration whether it would be a full-on private entry or a refreshed version of the "captive" mining plan. An amendment to the Coal Mines (Nationalisation) Act of 1973 for allowing private entry has been pending since 2000 due to political opposition. 

 

Developing Coal India Ltd's mines in joint venture with private players or allowing captive miners to sell surplus production have been on the UPA-2 government's table and may be picked up by the Narendra Modi government. 

 

Alternatively, it can push for the amendment - stalled since 2000 - to the Coal Mines (Nationalisation) Act of 1973 for allowing private entry now that it has a clear majority in the Lok Sabha. 

 

India has an estimated 250 billion tonne of coal reserve but still resorts to imports as Coal India fails to keep pace with rising demand. While delayed clearances and land acquisition must share the blame, the world's biggest coal miner has been hamstrung by rampant corruption, slow pace of modernisation and political interference. 

 

But any effort at reforms is bound to face strong opposition from political parties and unions. The Planning Commission's document on 12th Plan admits this. "There are political sensitivities in opening up the coal sector to private investment, but it is simply not logical to keep private investment out of coal, when it is allowed in petroleum and natural gas," the document said, advocating the need for amending the Coal Mines (Nationalisation) Act, 1973, pending since 2000. 

 

The National Energy Policy could take off on the forgotten Integrated Energy Policy of 2008 penned by a panel under Kirit S Parikh. Since then, every energy ministry has formulated its own "visions" and the idea could be to weave them together into a single canvas. 

 

There are two areas the government hopes to use the 'Gujarat model' outlined in the BJP manifesto - widening use of green energy sources and establishing a gas grid. 

 

Under Modi's chief ministership, Gujarat has established a leadership role in both areas. Gujarat announced a solar energy policy a year before UPA-II launched the National Solar Mission in 2010 and was the first state to lay an extensive gas pipeline network. The national solar mission would be expanded, the president said. State-run gas utility GAIL is already working along a blueprint for a national gas grid and government support would certainly be welcome.

 

 

Source: ToI