Adani eyes CIL’s closed mines

Centre to reopen 20 mines by leasing them out to pvt players

Hyderabad: The Narendra Modi government appears unstoppable insofar as serving corporates, particularly favourites like the Adani Group, are concerned. Amidst the rising coal crisis in the country, the BJP government at the Centre has decided to reopen, for now, at least 20 of its 100 closed or discontinued underground coal mines by leasing them out to private players to ramp up coal production in the country.

What is surprising is that the Centre chose private players over Coal India Limited (CIL), which is the world’s largest coal mining company. Expectedly, Adani Enterprises along with other leading private mining companies such as Reliance Industries, Tata Consulting Engineers Ltd, Vedanta and Essel Mining have already expressed their ‘keen interest to invest and expand coal production’.
As per the Coal Ministry’s estimates, the 20 closed/discontinued or abandoned mines have ‘extractable reserves of around 380 million tonnes (MT) of which 30-40 MT can be easily extracted’. All these mines are currently owned by CIL and are spread across its five subsidiaries namely Eastern Coalfield Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfield Limited (CCL), South Eastern Coalfield Limited (SECL) and Western Coalfield Limited (WCL).

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In all, the Central government is planning to reopen 100 closed or discontinued coal mines to meet the rising demand. The 20 closed or discontinued coal mines are the first lot of the 100 coal mines and the remaining will be opened in a phased manner. The CIL will lease out these mines to private companies for the extraction of coal on a revenue-sharing basis.

Central government officials openly say that the infrastructure in these coal mines are intact since they were operational, which makes them ready for the private players to take over. In addition, these companies will have minimum entry and financial barriers to reach their production targets.

If the sources in the Coal Ministry are to be believed, private mining companies expressing their keenness to invest and expand coal production would mean that they need the Centre to facilitate additional bank financing to start coal mining operations. The government, of course, is ready to go the extra mile and facilitate bank loans to make it happen.

At the recent investors’ meeting attended by mining giants, union Coal Minister Prahlad Joshi stated that the target of the Coal Ministry was to minimise the import of thermal coal and to make the sector Aatma Nirbhar (self-sufficient). He did not hesitate to add that the Coal Ministry was open to all suggestions which will assure a win-win scenario for the government as well as the mining companies.

It may be noted that India opened up coal mining to private sector companies such as Adani Enterprises and Vedanta for the first time in 2020 during the second term of the BJP government. The Modi government has now decided to hand over CIL’s closed mines to private companies despite Coal India recording a growth of 28 per cent in domestic coal production with 137.85 MT during April-May of 2022-23 compared to 104.83 MT for the corresponding period in 2021-22.