Adds Seth “Evacuating coal is a major problem and we are working with the railway ministry to solve the problem. The coal ministry has provided a budget of around Rs 300 crore for developing the network. However, issues like land are state subjects and we can only pursue the state governments to fast track land acquisition for mining as well as evacuation operations.”   WCL’s Garg adds that a congested rail network on the east-west corridor adds to the problems. “In view of the rising coal production, extension of the existing rail network is of utmost importance. We have initiated action for laying 46 km of rail line through Umrer Coalfields as a link to Nand Coalfields to augment incremental despatch capacity by 6.7 mt during 12th plan period.    To fast track coal mining projects and reduce the time taken to commence mining operations by at least one year, the CEA has made some suggetsions (See Box: CEA Recommendations). “These steps if implemented properly can reduce the time taken to operationalise mines by at least one year”, says Seshadri. Seshadri said CEA’s has suggested allowing exploration without clearance from the state government. “But the explorer will have to give an undertaking that he will not drill more than 15 bores an acre or cut any trees.”

CEA’s other suggestions include single stage clearance for prospecting instead of the present two stage. Currently before prospecting can start, terms of references are framed twice and suggestions and objections are sought by ministry of environment and forest (MoEF), and only then is clearance granted. “The terms of reference can be set in one go and suggestions and objections can be called straight away as the first set of terms of reference is standard across all coal blocks and the second one is specific to particular blocks,” suggests Seshadri. Another suggestion made by the CEA is to allow private companies to carry out mining operations in existing CIL blocks on a production sharing basis before the Coal Mines Nationalisation (Amendment) Bill 2000, is passed. CEA has sent these suggestions to the power ministry which in turn has passesd them on to the coal ministry. The coal ministry has now taken these up with environment ministry.    Other bottlenecks include the present capacity of Indian ports which is adequate to handle only around 30 mt annually. “There will be no problems till demand exceeds 50 mt, but after that unless handling facilities at the ports are enhanced, there could be further bottlenecks,” says Srivastava of MMTC, which handles coal imports for PSUs. The movement of coal from ports to the hinterland poses another challenge. A goods train takes 10 to 12 days to reach Panipat, Haryana from Mundra on the Gujarat coast. “The only solution to these delays is a dedicated freight corridor which may be ready only by 2016-17,” says Srivastava.    Quality and pricing    Another problem the sector is beset with is the quality of coal. Stones, boulders, mud, sand comprise typical consignment received by the power plants. And one of the reasons for the bad quality of the coal is the insistence on open cast mining to increase production.     CEA has suggested the development of coal washeries at mine sites, which will not only improve the quality of coal but also help carry more coal on the existing network.

Crisil has recommended the replacement of existing band-based pricing (Useful Heat Value) with the more objective and internationally accepted Gross Calorific Value. “It would not only incentivise producers to wash coal but also contribute towards environmental conservation as the ash content in the atmosphere will come down as would CO2 emission.”

But the coal ministry seems to be in a denial mode on the quality issue. Says Seth, “There is a provision of joint sampling if power companies have a problem with the quality of coal.” The real challenge for the coal sector will come at the beginning of the 12th plan, when projects which are in various stages of implementation will get stabilised. In 2013, according to estimates, coal shortage for the power sector will jump from 74 mt at the end of 11th plan to 150 mt as most of the ongoing projects are expected to be stabilised by that time. If India is hoping to make double digit growth then power sector needs to grow at 10 per cent and for power sector to grow at 10 per cent supply of coal through both domestic and imported means need to rise at 10 per cent.

Also Read

• Limited availability of coal, gas hurts power sector
• NTPC to retrofit power plants to increase imported coal use
• Power companies to import 35 million tonnes of coal
• Dispatch of coal to power firms a priority: Government
• Needs 1 million tonnes coal in 2011: Vedanta

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