Finance Minister Nirmala Sitharaman launched the sixth tranche of the auction for commercial coal mining. Coal import by the power sector dropped 41 percent in FY22 compared to the previous fiscal, she said, adding that it is not justifiable for a nation with huge coal reserves to keep importing the resource.
Finance Minister Nirmala Sitharaman launched the sixth tranche of the auction for commercial coal mining on Thursday in New Delhi and at the launch event complimented the coal ministry for conducting "a layered exercise for commercial mining in less than two years."
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"First tranche had 64 blocks, today 141 blocks are being opened up in one go. It is a landmark development," she said.
Coal Minister Pralhad Joshi, the ministry's additional secretary M Nagaraju and secretary Amrit Lal Meena were also attending the event.
Earlier, the coal ministry had said in a statement that the mines to be auctioned were fully and well as partially-explored coking and non-coking mines.
"A total of 140 mines have been covered across 12 states, including 72 explored mines, and 69 partially explored mines," said Nagaraju.
Nagaraju said that the coal mines would give Rs 20,000 crore in revenue to states once they become operational. They were expected to generate over 2 lakh jobs and bring in an investment of Rs 22,000 crore.
Meanwhile, Meena said that 11 percent coal was from auctioned blocks in the last fiscal year and the share of coal from captive mines has been growing yearly.
'India, with fourth largest reserves, isn't even a coal exporter'
The additional secretary said that bidders were allowed to surrender partial mines in case of difficulties. He added that coal gasification can lead to import substitution for many products.
During the launch of the first tranche, Prime Minister Narendra Modi had said that coal capacity needed to be unlocked. Sitharaman on Wednesday reminded that India, with the fourth largest reserves, isn't even a coal exporter. She said that from justifying imports earlier, the emphasis is now on coal exploration and mining. "After nationalisation of 1970s, we have moved from the times when only public sector units produced coal. Unfortunately, Coal India couldn't ramp up capacities as per need which led to coal imports," she said.
She said the base requirement for thermal power would be facilitated as per a new policy, which brings the Centre and states together.
"The policy gives revenue to many states. Eleven states will benefit from today's auction," she said, adding that the sixth tranche is a big step forward in releasing huge coal resources for mining.
"With global uncertainty and gas prices, coal gasification assumes importance," she said.
The Finance Minister said that the Indian stock of coal would also be used for gas as transitional energy as we move away from fossil fuels. "Today's blocks are located in Bihar, Rajasthan, Jharkhand, Odisha, Kerala, Chhattisgarh, Tamil Nadu, Madhya Pradesh, Maharashtra," she said, adding that from 23 percent CAGR of coal imports from 2010-14, it is now down to 2 percent.
Coal import by the power sector dropped 41 percent in FY22 compared to the previous fiscal. She stressed that it is not justifiable for a nation with huge coal reserves to keep importing the resource.
She said that the government is ensuring that policy stability and consistency drives investments.
"India is in the process of rapid growth and the Morgan Stanley report also highlights this. We are creating an environment and framing policies for inviting greater investments," she said, adding that consultative process with stakeholders is guiding the policies. "This is favourable for businesses to work and creates a virtuous cycle for the economy to grow," she said.
'Gave PSU's the best coal blocks, auctioning many that weren't used by them'
Joshi, who thanked the Finance Minister for the released funds for coal exploration, said the bidding would take place for coal gasification projects worth Rs 6,000 crore.
He said that as many as 67 blocks have already been auctioned and many would even begin production this year. He mentioned that 89 MT coal from captive coal blocks has already been produced.
"The total coal dispatch in 2014 was 572 MT. This year, we are targeting domestic coal production of 900 MT," he said.
He said that Odisha's revenue has reached Rs 50,000 crore according to state government data. "We had given the best coal blocks to PSUs and are auctioning the many good blocks which weren't used by PSUs," he said.
He said the upfront amount has been reduced and the mines overlapping with methane blocks and in litigation have been excluded.
Talking about the risks involved, Joshi said the ministry is taking measures to de-risk coal mining and has put the list for stakeholder consultation.
Several successful bidders that didn't have prior experience in mining are starting production shortly, he said, adding that the government wants to ensure power supply across India at affordable prices.
"A 100 MT coal gasification target and Rs 6,000 crore overall incentive can be availed," he said.
He said India will have to use the coal for the next 30 to 40 years while ensuring least damage to the environment.
First Published: IST