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Tuesday, October 11, 2011

Industry pushes for commercial mining in coal sector

Tue,Oct 11, 2011 |Source PTI

Industry body FICCI today sought transparency in allocation of natural resources and also introduction of greater competition in coal sector by allowing commercial mining.

FICCI President Harsh Mariwala emphasised the need for transparent market-based mechanisms in the allocation and utilisation of natural resources.

He urged the government to introduce greater competition in the coal sector, noting that India's productivity in the sector was one tenth of the US.

"The Government should immediately implement the recommendations of Ashok Chawla's Committee which looked into the issue of allocation of natural resources in great detail and suggested transparent mechanisms", Mariwala told a press conference.

"However, there is a need to look even beyond these recommendations in order to have more effective rules and regulations," he said.

Citing an example, Mariwala said although the Chawla Committee has not done so in its report, there was a need to introduce commercial mining in the coal sector through competitive bidding which would ensure that India's productivity of coal mining increases.

Currently, under the Coal Mines (Nationalisation) Act, 1973, the Central Government, a Government company (including a State Government company), a Corporation owned, managed and controlled by the Central Government can do coal mining without the restriction of captive use. Whereas, a private company can only do captive mining as per the Act, said FICCI.

Unless, commercial mining was allowed and greater competition introduced, India's coal productivity would not increase and the country would continue to be a net importer of coal, he said.

India's coal imports have increased from 59 million tonnes in 2008-09 to 89 million tonnes in 2010-11. In 2009-10, India imported coal worth Rs 37,000 crore.

"Substantial reliance on coal imports is unsustainable in the long run; the current productivity in coal mining in India is one-tenth of the US, which is the second largest producer of coal," Mariwala noted.

(sourced moneycontrol)

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