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New system may increase coal production in India

Oilfield Technology,

In India, plans are afoot to increase coal production by introducing a bill that will mean that the mines must share a portion of their profits with the locals. Currently, mining activities are hampered by lawlessness at the hands of Maoist rebels who claim that they are fighting for the rights of those who have lost the land to mining, and who control land containing millions of dollars of valuable minerals. It is hoped that profit sharing will prevent people from turning to such actions, and will thus boost mine production by as much as 25%.

The Indian government is planning to sell off coal blocks in a competitive tender involving both national and foreign bidders. The first coal blocks will be sold in March 2011, if current plans are put into action. Two of the conditions of the new system are that all coal must be sold locally, and – regardless of whether or not mines are making a profit – the equivalent of 10% of the royalties that would go to the state government must go to the locals. The ministry is drafting the rules for the bidding process and awaiting approval from the President for a parliamentary amendment that will enable the competitive bidding to take place. The coal minister told press that he hopes the new system will mean that India no longer has to import coal.

Access to this major fuel source has been a stumbling block to growth in the cement, power and steel industries. In this fiscal, coal demand in the country is estimated at 656.31 million t with domestic availability of 572.37 million t.

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