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Interaction | February 2015

We have identified 51 rail line projects for evacuation

Anil Swarup, Secretary, Ministry of Coal, government of India

Why is the ministry not encouraging focused miners in India?
Who says that India does not have focused miners? We have the biggest focused miner in the world - Coal India Ltd. Meanwhile, CIL is doing a marvellous job and in fact, it has been featured in the list of one of the top coal miners across the world on its production basis.

You need to appreciate that given the limitations, within which the organisation is working, CIL accounts a lot for India´s coal need. But my question was particularly towards the need for private focused miners...
Private miners are already assisting Coal India in mining excavation activities. A lot of mining works done by Coal India has been outsourced to private players.

So it´s not that the private miners are not there because for you a focused miner must be the one who owns it. Even though the private companies may not own the resources, they are assisting CIL in every aspect when it comes to mining operations.

That was my point, as most of the mine owners are considering mining as ¨one of their businesses option¨...
See, there is already an encouragement for private miners in India. We are going ahead with the auctioning process of coal mines and lot many of these mines will be in private hands thereafter. So where is the question of non-encouragement for private players? We will see how the public auction process works in which whether the international miners will participate or not. So it´s not that the 100 per cent coal activity will be done only by CIL. In future process of auction, a lot of coal mines will be handed over to private players for specific end use. More so after the auction process, we need to monitor how the private miners improve on their performance.

What are the steps that the ministry has taken ensuring improved output by CIL?
We have worked out a five-year clear-cut plan for ramping up the production from Coal India from the current 500 million tonnes to one billion tonnes a year by 2020. In fact Coal India has already readied its comprehensive mine-wise plans and it will be placed before the CIL boards at its forthcoming meeting. CIL has already identified key projects to reach the desired target. The identified projects would be brought under a development plan and will be kept under close monitoring of the Coal Ministry.

Coal evacuation remains a stumbling block. And with the auctioning of coal is in process, is it likely that the issue will again pop up?
Yes, evacuation is certainly a serious concern for all the coal miners in India. The ministry had already written a letter to the Chairman, Railway Board, where the Coal Ministry has identified 51 rail infrastructure projects where the ministry is ready to put in money as part of joint venture or by forming a special purpose vehicle.

Interestingly, some of the States, I would not like to name them now, have already shown their interest in supporting these 51 projects because all the States which have coal mines, consider evacuation as a major aspect which is holding back the sector. So we are very conscious of the fact that evacuation will remain a critical factor in the coming year; that is why we have identified these lines.

We are in intensive discussion with the Railway Ministry and other stakeholders to see how we can put in these lines in operation. These lines will not only serve Coal India´s evacuation but also help private miners. So there will be lot of value that will add as consequences of these railway lines. We do feel that these could become profit centres on their own as also to help CIL and other entities to evacuate the coal.

Will the coal ordinance encourage transparent coal allocation process in the country?
The sole initiative of the coal ordinance will be to increase its production. Since Lok Sabha passed it and Rajya Sabha was still considering it, it became necessary to re-promulgate the ordinance.

We are looking at either auctioning or allotting around 204 mines that have been cancelled by the Supreme Court. Now, the initial activity that we have done with regard to 101 out of the 204 mines will produce 350 million tonnes of coal by 2020. Overall, the 204 blocks are expected to contribute 500 mt of annual production by 2020. This is over and above the one billion tonne per annum target set on Coal India (CIL).

Hope the auction process is sailing through smoothly...
It is indeed. We have already started the auctioning process. The tender documents for 46 mines are already in the public domain. The auctioning itself with regard to Schedule II mines - 23 of them - will commence from 14th of February 2015 and will close on 22nd February and the requesting order shall be issued by 23rd March 2015. So there is a clear-cut timeline has been worked out for Schedule II and III. In the next phase, 103 assets (out of the 204 de-allocated by the Supreme Court) would be auctioned to captive users before March 2016.

How has been the response been for your auction process?
It may not be right to call additional levy imposed by the Supreme Court as heavy penalty. In fact large number of private players who wanted to participate in the auctioning process have already paid up around Rs 6,100 crore. So there is a lot of keenness about this auction process because till now more than 100 players have downloaded the tender document. So there is ample amount of excitement for auctioning. Importantly, the time is over to deposit the levy by 31st December 2014 and whoever has not paid will not be eligible to participate in the auctioning process.

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