India's growth projections may have to be reviewed if restrictions on the coal sector continue. Coal India Ltd (CIL), which produces 80 per cent of the country's coal, has been forced to scale down its output targets after closing the last fiscal with zero growth.
Indicating this, Chairman of CIL Nirmal Chandra Jha said that growth and restriction cannot go together and restrictions on coal production and end-users of coal might impact the economy. He was participating in an interactive session organised by the Merchants' Chamber of Commerce.
Pointing out that coal meets 52 per cent of India's primary energy needs he said that from a growth rate of 6.8 per cent in 2009-10, CIL ended 2010-11 with virtually nil growth with output standing at 433 million tonnes against 431 million tonnes in the previous year.
Environmental embargoes like go and no-go restrictions, coupled with the CEPI (Comprehensive Environmental Pollution Index) has severely hampered CIL's production plans which was also facing threats on account of law and order problems in certain mining areas. Even where exploration is possible, getting the licences from the States was a time-consuming affair.
Mr. Jha, who took charge in March from P. S. Bhattacharyya, said that against an initial target of 520 million tonnes this year CIL had reworked its target to 452 million tonnes for which a capital expenditure of Rs.4,200 crore was proposed to be incurred.
He said that though following some high-level intervention, the environmental issues have been relaxed a bit, but that CIL wanted more areas to work upon. He also mentioned as a major constraint, the issue of increasing stocks at the pitheads, saying that this was due to transport bottlenecks mainly in rail movement. CIL now has a stock of 70 million tonnes.
Referring to overseas ventures, he said exploration work at the two areas acquired in Mozambique was likely to start in another three months and the Central Mine Planning and Design Institute was now evaluating the bids received after tendering. The CIL board will also consider the proposals received for long-term offtake contracts with overseas companies which the company plans to enter into for importing coal.
Keywords: CIL expansion project