20 Jan 2018 13:08 IST

As power demand surges, Govt allots mines to Coal India arms

First allocation in 2 years; 11 blocks can produce 225 mt annually

After a gap of nearly two years, the Coal Ministry has restarted the process of allocating mines. The Ministry allocated 11 coal blocks to subsidiaries of Coal India Ltd.

“After the allocation of these blocks, all of Coal India’s subsidiaries will be producing 100 million plus tonnes of coal,” said Piyush Goyal, Minister for Coal and Railways, in an informal chat with journalists in New Delhi.

Interest in allocating or auctioning coal blocks had waned because of the increase in coal production and because consumers started to believe that ‘coal was flowing out of a tap,’ said Goyal, defending the lag in auctions. “Of these 11 mines, five are de-allocated and six are new mines. These blocks are estimated to have a production of 225 million tonnes per annum,” the Minister said.

The country’s coal supply value chain had come under pressure in 2017 with a sudden dip in hydro, nuclear and wind-power generation leading up to an increased dependence on coal-run power plants. This spurt in demand had also put pressure on the Railways to increase the number of rakes dedicated to ferry coal.

Three coal mines in Jharkhand were allocated to Eastern Coalfields Limited, four mines in Odisha to Western Coalfields Ltd and four mines, two each from Bihar and Jharkhand, to Bharat Coking Coal Ltd, said officials.

“As all of Coal India’s subsidiaries will be producing more than 100 mt per annum post allocation, this is in line with our target of achieving 1-billion-tonne per annum coal production from CIL by 2020,” he added.

Conveyor transport

Commenting on the roadmap to reduce the stress on the coal supply eco-system, Goyal said: “We have asked power plants that are in a 60-km radius to set up covered conveyor belts for transport of coal. Five power plants of NTPC and three of Damodar Valley Corporation have started work on these projects to transport coal over a distance of 20 km.”

“The cost of setting up these conveyor belts can be recovered within two years due to the lowered costs of fuel supply,” he added. OIn proposals for commercial coal mining, Goyal said: “I would prefer a system where the government will charge the companies per tonne of coal produced. There was a proposal from the industry to have a production sharing methodology.”

“A Monitoring Group headed by former Chief Vigilance Commissioner Pratyush Sinha is examining all proposals,” he added.