India started preparations for private commercial coal mining

Pratim Ranjan Bose 

After gas price index, its time for India to prepare a coal price index, which is the first step to open doors to private commercial coal mining. Private sector was so far allowed captive mining. 

A committee headed by the former Chief Vigilance Commissioner, Pratyush Sinha will meet stakeholders from power, steel and other industries on August 8 to start the process of . 

If the indications are correct, the government finally got courage to invite private miners. Though the legal framework was created in 2015, the government was tentative so far, and was merely allowing the State government owned miners in the commercial sector.  

Creation of an index means, the coal price in India will no longer be a preserve of government and Coal India Ltd but will be linked to global market. This was also necessary to infuse efficiency in Coal India which was so far doing business without elementary market risks.

The government has already made coal price GCV based in the past. During the first five years of Modi rule, third party sampling procedure was introduced to bring transparency in quality of supplies.

However, introduction of private miners is essential to ensure technical and operational efficiency. Barring mines under Northern Coalfields the rest of Coal India mines barely follow the best practices in the industry. Its nearly three lakh employees idle around and production growth comes from low paid contractual workers. Mechanization is suffering.

All these should change.

But there is a fear. The power generation lobby that speaks so much about coal quality is barely interested to give market price of fuel. Their interest lies in keeping coal prices low.

Obviously generators can refer to the problems in power distribution sector and the huge unpaid. But, they must remember that no reform is ideal and reforms must start from somewhere. They cannot have the best of both worlds.

From the business environment perspective, mining is a more difficult task than power generation. In a country with huge pressure on land, the miners are expected to keep acquiring land to keep production going. And, t do that they face all sorts of local political nexus.

It is in the wider interest of the country that the mining sector gets more productive, which needs private sector. And, private sector will not come unless and until prices are reasonably freed.

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