Coal blocks for private firms, CIL sent to Africa

NEW DELHI (TIP): State-run Coal India Limited’s pleas for coal blocks may have fallen on deaf ears but the government did not hesitate in asking the Maharatna company to go as far overseas as Mozambique in south-east Africa to prospect for coal.

For over four years, Coal India repeatedly wrote to the coal ministry seeking allocation of 130-odd blocks the public sector company said were essential for its expansion and for meeting existing commitments.

The ministry woke up to Coal India’s entreaties only after Coalgate and files began to move. But prior to Coalgate singeing the government, the coal ministry was more keen on backing propositions in a corner of Africa than domestic options.

In May, Coal India informed BJP MP Hansraj Ahir – whose complaint set off the CBI probe into allocations of coal blocks to private operators – that four CIL officers were posted in Mozambique to pursue opening of mines in that country.

Coal India officers were deputed to Coal India Africana Limitada, CIL’s subsidiary set up to explore and source coal in Mozambique. The venture set up shop in the city of Tete in March and expressions of interest for drilling – duly reported in the media – were invited in May.

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Around the same time, Coal India was having a hard time persuading the coal ministry to consider the allocation of 138 blocks with reserves of 57 billion tonnes to “sustain long-term production programme of CIL to meet the country’s demand”.

The government argued that CIL was unable to meet requirements of Indian companies, both private sector and state-run, and this had necessitated allocating blocks to private companies. But while CIL plans took a hit, private players failed to meet commitments defeating the government’s “power for all” policy.

The PSU received no intimation with regard to its requests till very recently. Coal India has been writing to the ministry since at least August 2008 about the blocks to little avail. On the other hand, the government set aside blocks for private parties who now face threat of action for not meeting timeframes.

Tete, a city located in the interior of Mozambique on Zambezi river, is the base of Coal India operations in the African country. A consultant has been appointed for undertaking an environmental impact assessment and preparing an environmental management plan so that drilling can start in a few weeks, CIL said.

CIL informed that a memorandum of understanding has also been finalized for an apex training organization for local people and the planning and designing of an institute is in progress.

The PSU’s enterprise in seeking to access coal deposits in a far flung country might be justified as mirroring similar ventures undertaken by Chinese companies in Africa, but CIL being denied access to coal blocks in India have raised questions.

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