Government weighs options to slash rising import of coal.

NEW DELHI: The government is evaluating three options to reduce dependence on costly imported coal, including diversion of surplus from captive coalmines to thermal power generators whose coal blocks are yet to become operational.

India, with a record current account deficit last fiscal, is making a policy to cut its import bill. Surplus coal from captive mines is estimated to touch 25 million tonnes by 2015-16. While private coal producers are not allowed to sell in the open market, state-run miner Coal India last month turned down a government-appointed panel's suggestion that it should act as banker for surplus coal. "The committee is evaluating options, significant being providing surplus coal to those producers who have been allocated coal blocks but are yet to become operational," a senior official, who did not wish to be named, told ET.

The panel, headed by Planning Commission member BK Chaturvedi, will submit its report by the end of this month. Despite being the world's third largest producer of coal and fifth largest in terms of reserves, India's domestic output has not kept pace with demand, forcing $16 billion worth of imports last fiscal. The same year, Coal India, which accounts for 81% of coal output, missed its target of 464 million tonnes.

Experts said companies like Essar Power, Jaypee's power venture and Hindalco could be the beneficiaries of such an arrangement.

The second option is to provide power producers with more than 65% of domestic coal and reduce the quantity later. As per the latest fuel supply agreement, Coal India will meet 80% of the demand. Of this, 65% will be from domestic mines and the rest through imports.

Source : economictimes.indiatimes.com