Wel­come Progress on Coal, At Last!

Kick off com­mer­cial min­ing at the ear­li­est

The Economic Times - - The Edit Page -

Forty-four years after cre­at­ing a state mo­nop­oly in coal, it is wel­come that the gov­ern­ment has de­cided to per­mit com­mer­cial min­ing of coal, which re­mains our main source of com­mer­cial en­ergy. Min­ing and evac­u­a­tion with­out spec­i­fy­ing end-use would al­low spe­cial­ist coal pro­duc­ers to re­alise economies of scale and scope and com­pet­i­tively seek cus­tom. The ex­tant pol­icy of a coal mo­nop­oly sup­ple­mented with cap­tive mines, whether al­lo­cated by auc­tion or not, is hugely in­ef­f­i­cent and gives rise to a host of rigidi­ties. And at huge na­tional cost.

In re­cent years we have im­ported up­wards of 1 lakh crore of coal, never mind our large proven re­serves, thanks to much pol­icy dither­ing. The coal sec­re­tary has re­port­edly de­clined to iden­tify the coal blocks, the es­ti­mated re­serves con­tained in them, or spec­i­fied the auc­tion method­ol­ogy to be fol­lowed. In­stead, the Cen­tre plans to is­sue a con­sul­ta­tion pa­per on com­mer­cial min­ing of coal, which is sen­si­ble. The way ahead is to trans­par­ently over­haul mar­ket de­sign and over­sight, so that ef­fi­cient pro­duc­ers can gain­fully boost out­put and sup­ply at fine rates. In tan­dem, we need im­proved en­vi­ron­men­tal norms for cent-per­cent ben­e­fi­ci­a­tion of coal in a time­bound man­ner. We sim­ply can­not af­ford to ferry mil­lions of tonnes of non­com­bustible shale and rock, wast­ing en­ergy on haulage and pre-empt­ing freight ca­pac­ity.

In par­al­lel, we do need to pur­pose­fully co­ag­u­late re­sources to hand­somely rev up ther­mal ef­fi­ciency in our power plants, which are by far the sin­gle-big­gest users of coal. Proven meth­ods like ul­tra-su­per­crit­i­cal boiler tech­nol­ogy would op­ti­mise power out­put at ther­mal sta­tions and ra­tio­nalise at­ten­dant fuel lo­gis­tics. We need proac­tive pol­icy to step-up ef­fi­ciency im­prove­ments right across the sup­ply chain in coal. Fol­low­ing the Supreme Court’s summary can­cel­la­tion of 214 cap­tive coal blocks awarded from 1993, bid­ding in­ter­est for cap­tive coal blocks has been largely muted since 2014. Now that in­ter­na­tional coal prices have be­gun to harden again, a bet­ter re­sponse can surely be ex­pected.

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