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Business News/ News / India/  ‘Acquire overseas coal mines to cut imports’
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‘Acquire overseas coal mines to cut imports’

The parliamentary standing committee on coal, mines and steel, chaired by member of Lok Sabha, Rakesh Singh, has made the suggestions.

Many Indian companies are increasing their coal imports amid a general shortage of the fossil fuel and ahead of the Supreme Court’s verdict expected on Monday. Photo: BloombergPremium
Many Indian companies are increasing their coal imports amid a general shortage of the fossil fuel and ahead of the Supreme Court’s verdict expected on Monday. Photo: Bloomberg

NEW DELHI : A parliamentary panel has recommended to the Union government and Coal India Ltd (CIL) to scout for coal mines abroad for potential acquisitions as the country looks to secure its energy needs amid global geopolitical tensions.

In its latest report, the parliamentary standing committee on coal, mines and steel noted that CIL had acquired blocks in Mozambique, but surrendered the licences in 2016 due to lack of cost effectiveness.

Noting that currently, the state-run coal miner is not pursuing acquisition of any coal block overseas, the committee, chaired by member of Lok Sabha, Rakesh Singh said: “CIL can still pursue overseas acquisition of coal blocks after detailed study and analysis of the blocks especially low ash coking coal which is not abundantly found in the country and import is the only option left. The committee is of the firm opinion that this will not only reduce import but also open new avenues of mining abroad."The committee asked the coal ministry to apprise it of developments with regard to CIL’s acquisition plans.

The suggestion comes on the backdrop of a severe supply crunch in April-May when India had to increase its coal imports despite high international prices as the country battled a power crisis. India has also ramped up its domestic coal output and it may touch 900 million tonne this fiscal.

With rising domestic production and high imports this year, the government seems to be confident to meet the power demand in the peak demand season of April-May 2023.

Coal minister Pralhad Joshi, recently informed the parliament, that around 358,000 tonnes of coal has been imported by CIL from Indonesia on behalf of thermal power plants of state-run generation companies (gencos) and independent power plants (IPPs). Citing data from the power ministry, he further said 86% of the imported coal has been utilized.

In November, Joshi had said that India is unlikely to face a coal shortage situation during the next peak power demand period in April-May 2023 as it would have adequate coal stock. He said by March-end, coal stocks at thermal power plants will be at 40 million tonne.

The parliamentary panel in its report also said that the coal ministry has informed it that CIL is making efforts to achieve zero coal import mission by FY24 for substitutable coal.

“The committee expect that with the increased coal production targets of 1 billion tonne, there should not be any imports for coal which could be substituted with domestically produced coal and through IMC (inter-ministerial committee) all consumers be pursued not to go for import of coal and use domestically produced coal."

The committee has also asked the IMC to apprise it regarding the achievement in reducing coal imports and promotion of consumption of domestically produced coal. It has also sought information on new mining site explored or developed by coal companies.

The committee has also recommended that increased impetus should be given to start mining in new areas after getting the necessary environment and forest clearance and also sought information of the new mining areas planned for the next three years.

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Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 24 Dec 2022, 10:08 AM IST
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