The Telegraph
Since 1st March, 1999
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Private coal mine on agenda

New Delhi, Sept. 11: The Manmohan Singh government is reviving plans to open up coal mining to private players, in a step that could further raise the temperature in the Left camp.

The proposal, being debated by an inter-ministry group on energy policy set up by the Planning Commission, favours an independent regulator for the industry, free trade in coal and encouraging Indian firms to buy mines abroad, especially top-quality Australian properties.

'Initiatives (are) needed to allow competition among existing producers and allowing entry of private sector in coal mining on terms that ensure a level playing field,' says the group's agenda note, a copy of which is with The Telegraph.

The Left is already unhappy over the plan to raise foreign direct investment limits in insurance, telecom and civil aviation as well as the Planning Commission's decision to induct World Bank experts into its working groups.

Its trade unions are strong in the coal belt and these helped scuttle plans by the previous A.B. Vajpayee government to open up the industry to private investment.

CPI leader Gurudas Dasgupta, who heads several coal miners' unions, said: 'We are totally against opening up the sector to private mining.'

But many feel the opposition of the Left unions may not be sufficient to thwart new blocks from being awarded to private mining companies. Privatisation of existing state-run mines, which too had been sought by the BJP, could well be stymied though.

So far, the only private players allowed to mine coal or lignite are power and steel companies that mine the minerals for their own captive consumption.

'Actual opening-up will not happen overnight. These things take time, laws have to be framed. Right now, we are simply thinking through things,' said a group member.

Strategists in the finance ministry and Planning Commission say they are pressing for these reform measures as they fear that a huge demand-supply gap in coal could put paid to the country's overall energy plans.

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