Majority of the 42 coal blocks fall under the forest area

The Coal Ministry has warned the government that the ambitious programme for exploration of 42 coal blocks identified for offer through competitive bidding during the XII Plan could be adversely hit unless the Ministry of Environment and Forests (MoEF) changes its existing guidelines for exploration with enhanced density of boreholes, as majority of these blocks fall under the forest area.

Sounding a strong warning, including severe shortage of coal for thermal power plants, the Coal Ministry has predicted serious implications for the southern States of Andhra Pradesh, Tamil Nadu and Karnataka and many northern and western States if important railway lines connecting coal fields in Jharkhand, Orissa and Chhattisgarh are not completed in the next three years.

In a note to the Ministry of Environment and Forests and the Railways, the Coal Ministry has stated that it would not be possible for the State-run Coal India Limited (CIL) to achieve either the targeted production of 615 million tonnes of coal by 2016-17 or any incremental coal production during the 12th Five Year Plan if the railway tracks in these three coal producing States are not put in place in the next three years.

Tata Steel has been asked by the Ministry of Environment and Forests panel to get forest clearances prior to seeking environment nod for its coal mining project in Jharkhand.

In the absence of transport network and faster envt clearances, benefits will be limited

After nearly 40 years of state ownership, the chorus of support for privatisation of coal mines is growing louder. With the economy ravenously short of coal to fire its power plants, and the state-owned Coal India Limited (CIL), which has a near monopoly in the sector, failing to meet the ever increasing demand from industry, the cause of privatisation is gathering strength.

This would boost NTPC's valuation ahead of its Rs 12,000 cr disinvestment this fiscal

The Power Ministry is in constant touch with Coal Ministry to speed up the re-allocation of three mines to NTPC, which would boost the power producer's valuation ahead of its Rs 12,000 crore disinvestment this fiscal. The government has decided to re-allocate three coal blocks -- Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) -- to NTPC but all the necessary clearances are not in place.

State-run coal miner Coal India Ltd is heading for a restructuring, with the government on Monday inviting expressions of interest (EoI) from consultants to draw out a plan. The idea is to spin off CIL subsidiaries as independent entities to ramp up production by infusing competition.

“It has been proposed to take up a study for restructuring CIL to assess drawbacks inherent in a monopolistic situation, for improving competition among coal mining companies, for evolving administrative structures to enhance planning capability in companies and improving investment plans,” the coal ministry said in a statement. Consultants have 15 days to submit EoIs and three months to submit the report.

The world's largest coal-based power plant is struggling to survive at the back of pricing problems

On Monday, a high-level inter-ministerial panel will take a call on fuel supply for Adani Power’s Rs 25,000-crore imported coal-based power plant at Mundra in Gujarat. The infrastructure and mining major had asked the government to review an earlier decision to cut off domestic coal supply for the flagship 4,620 megawatt (Mw) project. The world’s largest coal-based power plant is already struggling to survive at the back of pricing problems.

The steel ministry has said that there is no need to give any discount on the intrinsic value of coal blocks to steel companies to be auctioned through the impending competitive bidding process.

The ministry’s move is in sharp contrast to the power ministry’s demand that the reserve price of coal blocks — to be offered through the bidding route — be set at 90 per cent discount on the intrinsic value of the mine.

The coal ministry today said 35 power firms have so far entered into fuel supply agreements (FSAs)with Coal India Limited (CIL), amid the government stating that most issues relating to such pacts have been resolved. The statement follows the government announcing last month that power companies are likely to ink fuel supply pacts with CIL in a month's time.

"CIL after resolving the pending issues with power utilities have already signed 35 FSAs out of 114," the coal ministry said in a statement. The ministry also expressed hopes that the remaining 79 fuel supply pacts would be signed shortly. "The balance (FSAs) are expected to be completed shortly," the statement said.

Though the targets set were not met, the last two decades — particularly the later one — were marked by some revival of investor interest in the power industry, especially in the generation sector.

The momentum, however, was partly lost in 2012 as fuel shortages and political arm-twisting led to inadequate pass-through of costs, denting investors' confidence. Incidence of payment defaults by distribution firms worsened the financial position of generation firms, forcing the Centre to announce another massive bailout package for the sector, involving a recast of outstanding debts of R1.9 lakh crore.