We are open to a coal regulator, says Coal Minister Pralhad Joshi

Pralhad Joshi, Union Minister of Coal, Mines and Parliamentary Affairs
The Union government has got past the Covid-19-induced slowdown to successfully auction 38 commercial coal blocks. In an interview with Shreya Jai & Jyoti Mukul, Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi argues why coal production cannot be sacrificed at the altar of environment. Edited Excerpts:

Are you satisfied with the industry response to commercial coal mining even though three blocks received single bids?

Overall my take is that the success rate is quite good. Before 2014, there was a fear psychosis among people, who wanted natural resources including coal. There were legal cases, policy paralysis etc. Thereafter, 116 coal blocks were put for auction during 2015-2020, but only 35 were able to go through successfully. This time, at the official level the view was that less number of blocks should be auctioned, but at political level we wanted to offer more. We took the risk to offer all 41 ready coal blocks for auction. After taking the objections of Maharashtra and Chhattisgarh into account, the final tally of blocks was 38 for which 76 bidders showed interest and 43 placed bids. For 19 blocks, there were more than two bids. For three blocks, there was a single bid. We have a provision in the policy to go for immediate re-auction in the case of a single bid. So the total success rate was 60 per cent.

There was a bauxite mine in Odisha for which there was a foreign investor. Rahul Gandhi protested there. The investor fled in the end. In this atmosphere, at least domestic investors showed faith in the Modi government.

When would these mines start production?

I think in 18-25 months we will start the production as these are all old mines. We have also brought in a single-window system for faster clearances. There is a project consultant now in the ministry as well for addressing the issues of the investors. Investors have to get around nine clearances from the Centre and 11 from the states. For state-level clearances, we will coordinate with the states. As these are all working coal blocks (for which clearances are in place), there would not be much problem.

Why is it that Jharkhand moved the Supreme Court against the auction citing the timing and lower revenue realisation due to the Covid-induced slowdown, though a mine there received the highest revenue share?

Ministry officials and I met Jharkhand Chief Minister in July to convince him. At that time, he was very positive. He raised the issue of payment by Coal India Ltd (CIL) for land, but we resolved it there with CIL paying Rs 300 crore to the state. I also asked CIL to assess the other demands of land payment through joint survey and pay immediately. Despite that, they went to court. But they will be getting close to Rs 3,000 crore from these auctions.

Do you think states objected to auction because at the grassroot level they face protest and coal is considered polluting?

Whatever we are auctioning are not new mines. They were part of the Coal Mines (Special Provisions) Act, 2015. JMM was part of the UPA government and mines were allotted then. These mines were either not operational or CIL was their custodian because of deallocation. Second, we have decided not to import coal, and states and the Centre should work together for it. Despite having large reserves, we spent some Rs 2.40 trillion in 2018-19 on importing coal. CIL does pay for land and rehabilitation. It is building houses on wastelands, giving employment and paying compensation for the land taken. No state or central government, or their agencies, give these many jobs. The question is whether we want to go for imports or domestically produce it by building a whole ecosystem.

How do you plan to make coal cleaner and mining less damaging for the environment?

Coal public sector companies have an investment plan of almost Rs 2.5 trillion by FY2030 in new business areas of clean coal technologies and new mine development projects. They are making an investment of Rs 1.42 trillion in diversification projects, which also includes solar and thermal power projects, setting up of solar wafer production units, and clean coal technologies.

To achieve the vision of 100 million tonne of coal gasification, both PSUs and private companies will invest over Rs 4 trillion by 2030. CIL has also signed an MoU with ICFRE for mine environmental auditing. PSUs have also planted more than 100 million saplings.

Prime Minister Narendra Modi has set an ambitious renewable energy target. We should also consider that China burns 3.5 billion tonne coal and they are generating economical thermal power. Nothing has stopped in that country. Ultimately, we have to see what is the per capita energy consumption in India and what is the emission? Indians traditionally are environment friendly. People would have cut trees and not listened, so the ritual of worshipping trees came up. The Prime Minister is himself leading the world on environmental issues, but at the same time it is not possible to increase our energy consumption.

With the private sector now also into commercial mining, don’t you think there is a need to make coal benign and streamline regulations for having cleaner coal?

Let them decide what technology they want to use. As far as washeries are concerned, we have not banned them, but you cannot have that as well as electrostatic precipitator (ESP). You set a threshold for pollution beyond which industry licence will be cancelled. By making it mandatory, it had become a problem. We have to look at both the cost of power and pollution level.

Is there a need for a coal regulator, which was earlier proposed during the UPA regime, because now a whole new segment of private coal sector producers will come up?

It is on our agenda, but we have not come to any conclusion. Since premium and tax will be linked to the Coal Index, there is a view that there should be a coal regulator and we are open to that idea.

Do you see a need to do away with the current fuel supply agreement framework?

There are 12 types of ways of selling coal through auction and allotments. By making coal abundant, we will make these redundant so that there is no discretion that brings in corruption. There should be an open auction. Only quality and price should be there. Why attach conditions like there should be power purchase agreements? At most, there should be 10-11 per cent variation due to technical reasons like moisture due to rain. When you have coal, all these problems get resolved. We want to move towards a situation where there will be no need for fuel supply agreements.  

Production in non-coal mines has not started despite states allotting them. How do you plan to address this issue?

For non-coal minerals, we should offer more blocks. Both at the Central and state level, clearances need to be expedited. At the Central level, we are doing it already. Earlier it took 190 days for environment and forest clearance; now it is down to 90 days. We will bring it down further. States should also push for it.

States should cooperate with the Centre. For instance, Madhya Pradesh was cooperative during the commercial coal auction and their success rate was 73 per cent. Jharkhand saw the highest revenue. Ultimately it is for the welfare of people. These states do not have just coal but other minerals as well, so industry will come. These states should create an atmosphere for it.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel