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    India misses coal target again, will depend more on imports

    Synopsis

    Coal ministry will scale down its production target of 795 mn tones in 2016-17 as it expects problems in environment clearances, rail connectivity.

    ET Bureau
    NEW DELHI: India's dependence on imported coal will continue to rise as output will fall short of targets. The coal ministry will scale down it its production target of 795 million tones in 2016-17 as it expects problems in environment clearances and rail connectivity.

    The government's decision to de-allocate several coal blocks in past couple of years to private firms would also have an impact. Some experts say the de-allocation may hurt growth in production but on the other hand blocks that were not developed at all can start production if they are transparently auctioned after cancellation. Coal ministry will discuss its concerns with Planning Commission during the mid-term appraisal after the new government comes into power. The country is facing a coal shortage and rising prices of imported coal. Several power producers are seeking higher tariff to cover their losses as coal costs rose unexpectedly in September 2011 due to a change in law in Indonesia, India's largest source for coal imports.
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    The coal ministry's advisor for projects, DN Prasad, told an industry conference: "We will not be able to achieve 8% growth in coal production for the 12th Plan and need to revise estimates during mid-term review. When coal ministry set targets, it was not aware that Comprehensive Environment pollution Index will make us lose 42 million tonne of coal production from seven important mines. We also spent considerable time to comply with laws related to tribal rights. Besides these, three railways projects to evacuate coal did not take off in time." He did not comment on extent of short fall in achieving the target. He said coal ministry should streamline planning to be in tune with policies of other ministries. "We need to undertake corrective course of action to look at possible growth," said Prasad. It is not for the first time that India will revise its targets for coal production. The target for coal production for 11th Plan was initially set at 680 million tonne for 2011-12 but cut to 630 million tonne in the mid-term appraisal.

    However, India could produce only 540 million tonne of coal in the terminal year of the previous plan.

    Planning Commission member BK Chaturvedi told ET that coal ministry's targets were not aggressive. "You won't find targets challenging if set up your systems properly," Chaturvedi said.

    Experts in mining technology say better technology and equipment can help boost output.

    "India must ease the procedures to import modern equipments from the countries doing well in underground mining. Neither Director General of Mines Safety nor its affiliated laboratories are equipped to test and certify foreign mining equipments fit for usage and it is preventing leading technology providers from entering Indian market," Amar Bhasin, vice president, Hindustan Global Resources.

    Planning Commission estimated Indian coal demand at 770 million tonne for 2013-14 as against prospects of producing 606 million tonne. India is expected to import 163 million tonne during the current fiscal. In 2012-13, Indian coal production increased 3.3% over the previous fiscal to 557 mt as against the target of 574 mt.


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