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Wednesday, December 7, 2011

Efforts to expedite clearance for coal projects in India

Wed, 07 Dec 2011

At present, 176 Coal projects are awaiting Environment & forestry clearances at different levels. Ministry of Coal has taken up the issue with coal producing States and MOEF for fast tracking the Environment & Forest clearances, land acquisition R& R issues. Further following steps have been taken by the coal companies to expedite the clearances:

1. Vigorous follow up action with land acquisition officials of State Government to expedite acquisition proceedings.

2. Regular meetings with State Authorities viz. Land Revenue Commissioner, LR Secretary are held to resolve the issues.

3. Forest Officials are contacted on regular basis at District & Tehsil level to fulfill the requirement and answer the queries.

4. Periodical contacts are done with the Regional Office of MOEF/ MOEF, New Delhi for expediting clearance of the environmental & forestry proposals.

5. Discussions are held with the land owners/ villagers for selection of rehabilitation site and also to persuade them to shift to the rehabilitation site.

Besides this in order to bridge the demand-supply gap CIL is contemplating to acquire coal assets abroad and import the produces from the acquired coal to India. This foreign venture is being pursued from Coal Videsh Division at CIL Kolkata and several initiatives have been taken which are as follows :

CIL emerged as the successful bidder in the global tender process run by Govt. of Mozambique and acquired prospecting license of two coal blocks in Mozambique, namely A1 and A2, covering an area of 22,400 hectares in Tete Province. The PL entitles CIL to explore and develop the coal blocks over a period of 5 years. A 100% wholly owned subsidiary of CIL namely, Coal India Africana Limitada, has been registered in Mozambique for investment in coal resources.

Coal India Ltd had floated a global Expression of Interest in July 2009 to select Strategic Partner(s) in preferred destination countries like Australia, USA, South Africa and Indonesia to acquire stakes in the existing or Greenfield coal resources under the following deal structures:

1. Equity investment by CIL with long-term off-take contract at a price less than prevailing import price.

2. Only long-term off-take contract on cost plus basis at a price less than prevailing import price, with financial assistance (if required) by way of loan from CIL for production augmentation.

3. Formation of JV for exploration, development and operation of coal assets in any of the destination countries.

Through all the above deal structures, CIL proposes to import coal with the dual objective of ensuring security of supply and insulation from the volatility of global prices. However, the process is still underway and CIL has not yet acquired any mines abroad. In addition to this, Government of India has approved formation of a Special Purpose Vehicle through Joint Venture between CIL/SAIL/RINL/NMDC and NTPC, which has been registered as International Coal Ventures Private Ltd on May 20th 2009. The purpose of ICVL is to invest in coal resources abroad to meet the coal demand of partner companies. The SPV has been approved to have an authorized capital of INR 10,000 Crores and an initial paid up capital of INR 3,500 crores. Initiatives have been taken to primarily acquire coking coal assets in Australia, Mozambique, USA etc.

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