Financial Daily from THE HINDU group of publications
Tuesday, Jun 10, 2003
Financial Daily from THE HINDU group of publications Tuesday, Jun 10, 2003 |
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Industry & Economy
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Coal Captive mining plan draws good response from States Badal Sanyal
KOLKATA, June 9 ARMED with the Union Ministry of Coal and Mines' latest order authorising State Government companies or undertaking to do regular coal or lignite mining, a fairly good number of States have shown an interest to take up coal mining as a business through joint ventures with private investors. This is evident from the manner in which some State Governments have applied for virgin coal blocks to a committee set up in the Ministry for screening captive mining proposals. Although the committee was originally set up to examine proposals for developing coal mines for captive purposes, it is now screening proposals even for non-captive mines. Since most State Governments do not have the expertise or money to undertake coal-mining activities, they are looking for private partners who, in turn, have no hesitation to become the main promoter of the proposed joint ventures, which will ultimately develop the mines. Private investors are finding participation in such joint ventures financially viable because they will be allowed to market coal freely while the provisions of the amended Coal Mines (Nationalisation) Act, 1973 do not allow private promoters to sell coal from captive mines. Under the revised policy on coal mining by State Governments, companies or undertakings are allowed to do mining of coking and non-coking coal or lignite reserves either by the opencast or underground method, anywhere in the country, subject to the condition that the proposed mining area has not been allotted to a captive mining company under the provisions of Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act, 1973. The other conditions are: the company or undertaking concerned should have a provision in their Memorandum and Articles of Association to do coal mining business; such a company or undertaking should not seek financial assistance from the Central Government or Coal India Ltd (CIL) or Neyveli Lignite Corporation (NLC); and there should not be any demand for taking over the mines by the Central Government or CIL and NLC in the event of closure of such a mine or otherwise. Moreover, no employee of the proposed joint ventures will be absorbed in CIL or NCL at any point of time. Informed sources indicate a section of private companies, which already hold virgin coal blocks for captive coal mining purposes, is showing an interest in handing over the blocks in favour of joint ventures with the State Governments because, they feel, the development of mines falling beyond the purview of captive consumption purposes, will give them the freedom to sell coal in the open market too.
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