In order to increase coal production, Moily must ensure that projects do not get inordinately delayed on the issue of clearances that apparently plague the industrial development, particularly in the mining industry

With Jayanthi Natarajan leaving the ministry and Veerappa Moily taking over the additional responsibility of becoming the Minister of Forests and Environment, there is a general feeling that he would take the task of increased coal production more seriously to ensure that projects do not get inordinately delayed on the issue of "clearances" that apparently plague the industrial development, particularly in the mining industry.

CMD Narasing Rao of Coal India had given instances where, even after obtaining the Stage I clearance in March this year, nine months later, the mining operation could not start for lack of Stage II in one particular case. Like this, there were other issues that have delayed commencement of operations. But, as the government was keen to get the FSAs (fuel supply agreements) signed, Coal India had to comply with the bleak prospects of actual supplies when they would become due!

In order to overcome such difficulties and to ensure that the coal industry actually got some international support from well known companies, the Government of India has sought Coal India to identify at least six big size mines that can be offered under the public-private-partnership (PPP) contracts, during 2013-14, with a view to invite leading global miners, such as BHP Billiton, Rio Tinto, Xstrata and others.

Coal India is expected to identify a few mines with at least 10 million tonnes a year capacity. Generally, the life of a coal mine is 20 to 25 years and mine developers would pay costs to CIL on a tonnage mined basis.

To expedite the issue, in fact, CIL will help a private miner with both forest and environmental clearances, besides land acquisition and rehabilitation, considering the case that the foreign participants would not be conversant with the local conditions. This is a strategic move in the right direction.

Once the mines are located, chances are that MOEF clearance may be "sanctioned" in advance, to expedite the process, after which the private partnerships may be selected through a bidding process. It is considered to be a more practical way to bring in foreign companies on a contract mining basis, where the miners are likely to quote a rate on a tonnage mined basis. Miners with global standing may not indulge in mine developer and operator contracts, as practised in the country. They need to take into account the added responsibility of ensuring transportation of the mined coal to the required site.

Full and further details are expected to be announced shortly.

The only major question that comes to our mind, in writing this story is why the government does not consider the issue of adding Coal Bed Methane, a secondary product that goes waste, to be included in this as part of the development contract? Another issue could also be to make it mandatory for the overseas partners to bring in the most advanced equipment and technology that is available, so that mining operations can be started within the agreed time frame and coal supplied to the starving industry?

If Veerappa Moily can ensure MOEF clearances before the bidding start, half the battle is won and rest could be on a better wicket!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)