In recent news, the Government of India (GOI) welcomed the commercialization of black gold mining. GOI has allowed entry for the private sector in coal block auctions. The GOI plans to auction 41 coal mines in the recent future. While the news media is providing updates every other day, many don’t fully understand the issue. Here is all you need to know about coal mining in India.
India is a rich reserve of coal. It fuels our 55% of energy needs. It is fondly termed as ‘Black Gold’ for it is the most abundant fossil fuel in India. With India cruising on the pathway of development, it will require large amounts of energy. The known resources include petroleum & natural gas, hydel power, and nuclear power apart from coal. There are limits to these resources. Quality Natural gas is limited. Hydel power has environmental restrictions. Nuclear power has a geopolitical influence. Hence, coal remains to be our only hope.
Digging into the Past:
India has a long history of coal mining. It started before Independence during the early rule of East India Company. It also became an important parameter in the Five Year Plans post-Independence.
These coal mines were the part of the commercial sector initially. However, private owners did not strive for the overall development of the country. Also, there was an increase in unlawful mining practices. Hence, GOI nationalized the mining of coal between 1971-73. After the LPG reforms, captive mining was started. This included companies doing mining to meet their power needs without owning any mines.
About 200 million tonnes of coal is imported into India every year. This is bad for our fiscal maths and GDP. Besides, some of the Indian companies acquired coal mines in other countries to ensure a continuous supply of coal, free from restrictions of the GOI. This has further added to the stress.
There are multiple factors because of which the coal sector is in a bad shape. Environmental and ecological policies, delays by government, PSU monopoly, out-dated technology, and methods, the non-transparent and discreet process has resulted in making the entire business very murky. Besides, the regulatory board is not keeping the balancing between operational costs and selling rates. Also, there is a fall in the production curve.
Initiatives like Unlocking Transparency by Third Party Assessment of Mined Coal (UTTAM) by the Ministry of Coal to keep a check on quality, Online Coal Clearance System, Reverse auctions and Coal Allocation Monitoring System have been launched to improve and clear the fog surrounding the business.
The commercialization of Coal Mining:
The idea is to enable India to achieve self-sufficiency in the energy sector. Besides, this will also boost economic development by increasing production. Further, it will also increase employment by creating new job opportunities. In short, with proper regulation, these initiatives can bring a lot of things for India.
There is a dire need for two things. Firstly, the increase in productivity of coal. Secondly, the need to switch to more cleaner and alternative fuels.