New Delhi: At least 22 mines owned by Coal India, the world’s biggest coal miner, face closure over environmental concerns in Jharkhand, potentially suffering an output loss of up to 40,000 tonnes a day, officials said on Wednesday.
Coal India’s shares were down by as much as 4.3% at 02:30 pm on a Mumbai market that had lost close to 1% on weak Asian peers and concerns over global growth.
The mines, which provide mostly coking coal for state-run firm Steel Authority of India Ltd , are located in Jharkhand state where pollution control authorities accuse them of running without proper forest clearance permission.
“We have issued an order to them to shut down,” said Sanjay Kumar, member of Jharkhand State Pollution Control Board.
But a senior official at Bharat Coking Coal Ltd (BCCL), a unit of Coal India which operates these mines, said they had not yet received the closure order.
“We have not stopped production yet,” D.C. Jha, BCCL director, told Reuters. “We will have to close down once we get the order.”
Jha said the 22 open-cast and underground mines together produce about 35,000-40,000 tonnes of coal a day, adding that the company would petition the federal environment ministry on the matter.
India’s second largest company by market capitalization, Coal India accounts for nearly 80 percent of coal output in a country hungry for electricity needed to keep up its near-double digit growth.
The Kolkata-based miner has seen its shares rise over 25% this year, after the Indian government sold a 10% stake for $3.4 billion in the country’s largest IPO ever last November.
But local coal supplies are falling short of demand not only because India is building more power plants but also because domestic mining projects are running into environmental and land acquisition delays.
Earlier this month, state-run Coal India said it was in talks for one acquisition each in Indonesia, Australia and the United States, but was awaiting the government’s nod to go ahead with the deals.