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Coalmin scales down production projection by almost 300 mt

Marred by insufficient coal supply, stringent norms of the Environment Ministry on coal mining in densely forested areas and poor weather conditions, the Coal Ministry has been forced to scale down its production projection of the precious mineral at the end of the 12th Plan period by almost 300 million tonnes.

According to sources, while the ministry has already brought down its production target to 558 million tonnes for the current fiscal (which is the last year of the 11th Plan period), from the original proposed 680 million tonnes, there is a feeling within the ministry’s officialdom that by the end of 2016-17, coal production may only reach around 710 million tonnes.

The ministry’s coal production projection of 710 million tonnes by 2016-17 (the last year of 12th Plan period) falls short by almost 300 million tonnes from its own working group’s earlier projection that coal production by that period may be a little more than 1,000 million tonnes.

This calculation was made by the ministry in 2006-07 when the working group was calculating projections for both 11th as well as 12th Plan period, sources said.

In the absence of strict environmental norms at that time, it was felt in 2006 by ministry officials that by the end of the 12th Plan period, riding on robust demand and supply cycle, it would be able to match the 1,000 million tonnes figure. However with green clearances to coal blocks becoming rare during Jairam Ramesh’s tenure as the Environment Minister, the coal ministry’s projections went for a toss and coupled with various other aspects, it is now struggling to meet the yawning demand and supply gap.

Though the Environment Ministry has now eased its stand on the Go and No-Go norms for giving the green okay to coal blocks situated in eco-sensitive zones, years of strict vigilance by the green ministry as well as Coal Ministry’s own policy of giving captive blocks only to end-user sectors like power, cement and steel, has left it with no other option but to bring down its projections for not only the current fiscal but for the 12th Plan period as well.

The expected shortfall of around 300 million tonnes in domestic coal output however does not come as a surprise, top government sources say, as Coal Minister Sriprakash Jaiswal himself recently said that if proactive measures are not taken to bridge the demand-supply gap for the fossil fuel, then the shortfall is likely to exceed 200 million tonnes in the forthcoming Plan period.

Going by the current scenario, the escalation in demand-supply mismatch for coal reaching 300 million tonnes does not seem impossible, an industry source told an english daily. The ministry’s concern can be gauged from the fact that even the Planning Commission has estimated that domestic coal production could be around 770 million tonnes by 2017 on the basis of projected annual growth of around 7% in output.

Though now the Coal Ministry is mulling the option of giving captive blocks to private miners in order to bridge the demand-supply gap, it is felt that this step too may be inadequate to cover the shortfall, which has been the result of years of lackluster production.

The shortfall in domestic output of coal has had a cyclical effect on the power sector, as lack of fossil fuel has hit the generation targets of the power ministry for the 12th Plan period as well.

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