Moily effect: Coal India poised for a bright future

M Veerappa Moily’s takeover of the environment & forests ministry last month, it appears, is turning out to be a blessing for Coal India Ltd (CIL), the world’s largest coal producer.

The new environment norms will, from 2014-15, allow CIL to add to its output at least 40 million tonnes (mt), or nine per cent of its estimated production in 2013-14.

The ministry, under Moily, has cleared major CIL projects, including subsidiary Central Coalfields’ Kathara open cast mine, which had been awaiting clearance since 2008. 

Other CIL projects — Western Coalfields’ Chhinda expansion, Bhakra underground and Ukni deep-opencast projects; and Bharat Coking Coal’s Dhanbad project — will also benefit from the new rules.

Besides, the ministry has also increased the cap on one-time capacity expansion of small coal mining projects from 25 per cent to 50 per cent. This will help CIL kickstart, without local public hearing, its pending projects involving 50 per cent capacity expansion. “The move will allow Coal India to produce an extra 40 mt of coal,” a senior CIL executive told Business Standard.

The new rules apply on one-time capacity expansion proposals that don’t involve additional land acquisition. According to a ministry circular, the ability to increase capacity without a public hearing applies to increased capacity of less than one million tonnes.

Based on the recommendations of a committee headed by Planning Commission member (energy),

B K Chaturvedi, the government had in 2011 allowed CIL to expand production in projects requiring up to 25 per cent capacity enhancement without public hearing. The latest move has increased the scope to 50 per cent expansion.

The world’s largest coal miner is likely to close the current financial year with a five per cent production growth - a four-year high. 

The company is likely to produce 475 mt in the year through March, marginally missing the year’s target of 482 mt due to procedural delays in forest approvals. Around six of its mines, with a combined capacity of 20 mt, are still awaiting the environmental approvals that should have come by October 2013.

In 2012-13, CIL’s production had fallen 11.8 mt short of its 464 mt target; its coal offtake was recorded at 465.18 mt. The company’s production this year is projected at around 475 mt.

Moily, also the petroleum minister, had taken additional charge of MoEF on December 23, after Jayanthi Natarajan’s resignation.

Projects worth Rs 10 lakh crore were said to have been stuck during Natarajan’s term. Since taking charge, Moily has been instrumental in clearing about Rs 1.5 lakh crore worth of projects, including Posco’s proposed Rs 52,000-crore integrated steel plant in Odisha.