NEW DELHI, Nov 20 (Reuters) – India will allow locally registered foreign firms to mine and sell coal when commercial mining is permitted as part of the opening up of the nationalised industry after four decades, Coal Secretary Anil Swarup told Reuters.
To end a chronic coal shortage that cripples power plants and curb the country’s imports of the fuel, the Narendra Modi government will also spend about $1 billion by 2019 to buy railway wagons and transport coal from remote mines, Swarup said in an interview on Thursday.
The government last month made provisions for private firms to commercially mine coal but did not set any timeline for when actual digging will start.
The decision will open the door to global giants like Rio Tinto and BHP Billiton and help ramp up output from India’s huge reserves – the world’s fifth biggest.
“Any company registered in India can bid (when a commercial coalfield auction takes place),” Swarup said. “So a foreign company registered in India can also bid, provided they fulfil other conditions.”
Opening up the industry will increase private coal production to about 400 million tonnes by 2019 from less than 50 million tonnes last year, Swarup said.
As of now, only power, steel and cement companies can mine coal for their own consumption. Commercial mining in India is dominated by state-owned Coal India Ltd.
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Coal India is the world’s largest miner of the fuel but its unionised workforce resists mechanisation fearing job losses. The resulting inefficiencies are partly responsible for years of missed output targets and India’s coal imports.
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