Govt may engage foreign firms to boost Coal India’s output: minister

The government proposes to allow foreign firms to operate some of Coal India's mining projects in a bid to raise coal production as the state-run monopoly has failed to meet its output target for years, coal and power minister Piyush Goyal said.

He said the government will unveil a plan to modernise CIL's mines by October as coal production at the world's top coal miner has been constrained by inefficiency, worker strikes, delays in getting environment clearance and other issues.

As a result, India has been the world's third-biggest coal importer despite sitting on the fifth-largest reserves, and coal shortages have contributed to utilities' difficulties in providing enough power.

"For augmentation of coal production in the country, a few projects of Coal India have been identified for operation under the mine-developer-cum-operator route, where international as well as domestic operators may take part," coal and power minister Piyush Goyal told parliament on Thursday.

Goyal said the government had approved 15 projects for Coal India, with a total combined annual capacity of 136 million tonnes, for the five-year plan period of 2012-2017.

Coal India produced 462 million tonnes in the last fiscal, against a target of 482 million. However, CIL has been unable to lift output quickly to help realise Prime Minister Narendra Modi's promise of power for all, he said.

But, given issues such as the difficulties in acquiring land in India, international firms also may find it difficult to bring mines into operation, it has been pointed out.

It may be noted that India's largest power generator NTPC Ltd, which engaged Thiess Minecs, the Indian mining unit of Australia's Leighton Holdings to operate its captive coal mine, had in May decided to terminate the $267-million contract as Thiess failed to make any progress in developing the mine, even though the development period had been extended twice.