HomeEconomy News100% FDI in commercial mining will speed up the auction process, says former Coal India chairman

100% FDI in commercial mining will speed up the auction process, says former Coal India chairman

The government on Wednesday liberalized the rules for foreign direct investment (FDI) in four sectors, including in coal mining where the central government has allowed 100 percent FDI in the automatic route.

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By Latha Venkatesh   | Sonia Shenoy  August 29, 2019, 9:58:25 AM IST (Published)

100% FDI in commercial mining will speed up the auction process, says former Coal India chairman
The government on Wednesday liberalized the rules for foreign direct investment (FDI)

in four sectors, including in coal mining where the central government has allowed 100 percent FDI in the automatic route.

Partha Bhattacharya, former chairman of Coal India, talked about the government's decision and the health of the mining sector in an interview with CNBC-TV18.

“This is a highly welcome measure and going forward can make a big difference to the energy security of this country,” said Bhattacharya.

He added: “In FY18-19 India consumed 965 million tonne of coal against the production of 730 million tonne and this 730 million tonne is when Coal India registered a very stellar kind of performance with 7 percent growth and 40 million tonne of incremental production.

“The balance 235 million tonne had to be imported. In that 235 million tonne 125 million tonne is thermal coal for non-coastal power, which we shouldn’t be importing because we have abundant resources. Therefore, this is clearly a mismatch between capacity for coal mining that is available in the country and the demand. Therefore, we have to increase capacity."

In order to increase capacity, Bhattacharya said: “We need more players to come and for this 125 million tonne per annum we have to allocate reserves to make that happen.”

On the auction front, he said: “The step of FDI being approved for coal mining will definitely lead to some sort of action and I am sure the ministry of coal will change their course a bit and try to make it faster.

“International coal miners will be looking at India closely because India is the only country today where coal mining is on a growth path; everywhere else it’s either flat or on decline. Mining definitely is profitable in this country unlike many other countries."

He said that there is an expectation of a lot of interest in coal mining in India if large mines are allotted.

“We will create a coal market where every buyer and seller will have a choice because if the country’s demand is met then there will be no embargo on exporting coal. So India will become a vibrant country as far as coal mining is concerned,” added Bhattacharya.
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