Private coal mining on the cards, says report

The government may allow commercial coal mining by private companies as it looks to plug the production gap in a sector crucial to India's power generation as well as industrial growth. The move is likely to benefit international miners with Indian tie-ups like Vale and Rio Tinto.

Currently, state-run firms such as Coal India Ltd and Bharat Coking Coal Ltd enjoy a monopoly over coal mining and sales in the country. Private companies are allowed to mine only for captive consumption. However, an Economic Times report quoting unnamed sources says the Coal Nationalisation (Amendment) Bill, 2000, introduced in the Rajya Sabha by the former NDA government to carry forward reforms in the sector, may now get a fresh lease of life.

The budget due to be presented next month is likely to lay out the government strategy, according to the report. India is expected to import 35 million tonnes of coal in the current financial year ending in March 2010 to drive its power utilities, former power secretary V S Sampath had said in March.

India produces 450 million tonnes of coal, about 50 million tonnes less than its consumption.