Coal news and updates

Underground coal gasification gets Cabinet approval

India Coal Market Watch

December 17: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a policy framework for development of underground coal gasification (UCG). The process would be carried in coal and lignite-bearing areas in the country. UCG is a method of extraction of energy from coal/lignite resources which are otherwise regarded as uneconomical to work through conventional mining methods. 

Coal Secretary Anil Swarup said the decision regarding UCG was taken as it was difficult for Coal India to supply to the small, medium and micro end-users of coal. He further added that the focus of Coal India was obviously for larger units but the smaller units were starved of the fuel. Thus, it was with this objective in mind that the coal sector has been opened up.

This UCG policy is similar to the existing one for coal bed methane (CBM) development, based on revenue sharing for offering blocks through competitive bidding. In the perspective of the next two years, some explored blocks will be identified for offer.

Subsequently, additional blocks will be identified for offer in the long term. 

The Ministry of Coal may engage a consultant for development of the contract document.

For development of the of bid document, work programme, conducting the bidding process, evaluation of bids, monitoring and process protocols etc, the Central Mine Planning and Design Institute Limited (CMPDIL) will be the nodal agency.