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MoEF asks CIL arm to take prospecting licence for finding new coal mines

Financial Express (New Delhi), 19th JUne, 2013

The ministry of environment and forests (MoEF) has asked Central Mine Planning and Design Institute (CMPDI) to obtain prospecting licence for getting easy forest and environment clearances, crucial for increasing exploration activity for identifying new mineable coal reserves.

India, at present, has an estimated proven coal reserve of 118 billion tonne, expected to last 100 years, but CMPDI has to identify mineable coal reserves ahead of the two Plan periods. With demand for coal in the country rising, the Coal India (CIL) subsidiary has been asked to identify more mineable reserves, for which it has to enhance its prospecting and drilling. CMPDI has been so far prospecting without obtaining any prospecting licence, but the MoEF has now asked it to take prospecting licences.

AK Debnath, CMPDI chairman and managing director, told FE that the company has told the ministry that it was not in favour of taking any prospecting licence since it was only another procedural addition.

He said the Planning Commission has set a target of prospecting 15 lakh metres per annum by the end of 12th Plan period in 2017, up five-fold from the present annual average prospecting. The company has chalked out plans for achieving that target, but they were facing problems on two counts. Firstly, the MoEF would have to allow CMPDI to dig at least 15 bore holes per sq km against a present permissible average of 1-1.5 bore holes per sq km. Secondly, Mining Exploration Corporation (MECL), which helps CMPDI in exploration activities, has demanded enhanced drilling rates, for which the coal ministry’s approval is required.

There were restrictions from the MoEF in taking drilling equipment to forest areas. “If we have to go by the MoEF restrictions then achieving 15 lakh metres per annum prospecting would be impossible. The coal ministry approached the Prime Minister’s Office to ease norms but now the government wants us to take prospecting licence,” Debnath said, adding, “We are absolutely against taking any prospecting licences for CIL and no CIL blocks and want to continue our activities under the old format”.

Besides, CMPDI has asked the coal ministry to revise rates for MECL since the rates for promotional drilling was last fixed in 1991. The coal ministry, according to the 1991 rates, pays R3,936 per metre for promotional drilling of coal and R2,423 per metre for drilling lignite. These rates are inclusive of return on a capital of 10.75%, an MECL official said.
MECL has now demanded R4,904 for per metre for drilling coal blocks and R4,315 for per metre for drilling lignite blocks, without which the PSU company would not be able to match its cost.