Of the 240 blocks identified by the Government for captive mining, 182 blocks have been allotted to the private and public sector companies of which only about 23 mines are operational, said Mr R.K. Sachdev, former advisor (Coal) to Government of India and President, Coal Preparation Society of India.
Speaking earlier this week at the seminar on “Mining in India: The Expanding Horizon,” Mr Sachdev, said, “Though mining has a long gestation period, the industry should invest in the latest technology to cut down time frame for starting production.”
Domestic production was expected to be about 501 million tonnes in 2008-09, while the demand was pegged at 553 mt, a gap of 52 mt. The demand-supply gap may increase to 56 mt by 2010-11 on the back of increased consumption from the power sector, he said.
Apart from constrains on financial closures upon getting various clearances, other issues plaguing the industry are inadequate geological data for investment planning and a delay in granting mining leases by State Governments and the non-availability of infrastructure such as roads and railway sidings, he said.
Mr L. Pugazhenthy, President, Indian Institute of Metals, said, “It is going to be a painful year for the mining and metal industry with the global meltdown descending on India.”
However, the buoyant domestic demand may partially ring fence the Indian metal companies, but they have take upon innovation to cut cost.
Stressing on the need for an independent regulator for the coal sector, Mr Ibrahim Ali, Managing Director, RBG Minerals Industries, said, “Coal India can be considered for being a regulator if the Government can spin off the business interest into a separate company, so that there is no conflict interest.”
In fact, the Government can even consider offloading 51 per cent of Coal India in the market for greater transparency and assign Navratna status to it, said Mr Ali.
“The delay in getting a clearance for mining can be gauged from the fact that it has to pass through 97 tables in the government offices. It takes about four-six years before the licences are issued,” said Mr Ali.
The Government should consider auctioning of coal blocks instead of the current administrative allotment procedure. It will also enhance earnings for the Government, he added.
On the back of low recovery levels, it will be prudent to revisit the reward policy.
Source: The Hindu Business Line
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