The Centre’s announcement allowing 100% foreign direct investment (FDI) in the coal sector should enhance Coal India Limited’s (CIL) competitiveness and efficiency, said Partha S Bhattacharyya, former CIL chairman.
Ease-of-doing business
However, he felt that while this would kindle the interest of global miners, they would need increased ease-of-doing business and time-bound approvals before they invest here.
“The government has taken a slew of measures, but more needs to be done — they look for large mines and a simplified single-window for mining leases and environmental and forest clearances,” he said.
In India, it takes at least six years from getting a mine allocation to actually starting mining operations.
This has now been fixed at 66 months. The Coal Ministry is taking steps such as doing away with the need for prior approval before a State government hands over the mining lease, which typically takes 6-12 months.
“Overseas investors usually do not view such long timelines favourably,” Mr. Bhattacharyya said, adding India was among the few countries that still offer opportunities in the sector as most western countries had shut down coal mines.
He added that increased mining will also lower “avoidable imports of coal that India has to make due to the prevalent demand-supply gap. CIL’s production is growing at a fast clip, but in 2018-19 India spent about $8 billion on importing 125 million tonnes of coal for non-coastal thermal plants.”
Vedanta chairman Anil Agarwal said, “100% FDI in mining... will send a positive signal to global investors and give a significant push to the economy.”
A senior Essar official told The Hindu , “India is one of the largest importers of thermal coal. Government allowing 100% FDI in coal mining will attract global miners of the likes of BHP and Anglo American. This will result in FDI inflow along with updated technology, and increase India’s coal production.” The Coal India chairman could not be reached for his comments.
