Indian Government Fast-Tracks $2 Billion of Coal-Mining Projects

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Researched by Industrial Info Resources India (Delhi, India)--The Government of India has put 90 of nearly 150 greenfield and brownfield mining projects, owned by the coal behemoth Coal India Limited (BSE: 533278) (Kolkata), on the fast-track to augment domestic coal supply and ensure uninterrupted power generation following the cancellation of mining licenses by the country's apex court. These projects entail a cumulative investment of around $2 billion.

Already, red tape hurdles such as forest and environmental clearances, stalling 28 other coal mines spread across the country, have been lifted, paving the way for additional coal production of over 90 Million Tons (MT) from these mines over the next year or so. The lower-level forest bureaucracy in the states will now have the power to grant forest clearance to miners if the project is temporary in nature and does not require major deforestation.

A decision to this effect has been taken by the environment ministry, doing away with the need for a clearance from the central government in such cases or even a clearance from high-level authorities in the state. Such decisions will now lay with the district-level forest administrator, the Divisional Forest Officer (DFO).

While the government is working on rolling out the coal block auctions soon, it is imperative to raise domestic output of coal as well. The government has decided to fast-forward all of pending projects of CIL by flagging them with the project monitoring group in the cabinet secretariat. The group is responsible for steering big-ticket projects caught up in red tape-induced delays.

India's coal ministry has, recently, taken up 38 such mining projects with the cabinet secretariat involving an investment of close to $1.1 billion, most of them awaiting green clearances and land acquisition. These are on top of 25 other mining projects that involve investments of $300 million by CIL.

Though India is rich in coal reserves, said to be the third largest in the world, it imported 171 MT of coal for $16.41 billion in 2013-14, far higher than the 145 MT it imported a year ago. Between April and September 2014, the country has already imported around 110 MT of different varieties of coal. Coal India produced 462 MT of coal last year, missing its output target by 20 MT. The shortfall is expected to increase to 180 MT by 2016-17.

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