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January 11, 2014

Government eases environment clearance norms for coal mines...


Government eases environment clearance norms for coal mines...

The government has eased environmental clearance norms for expanding coal mines, which will help state-run Coal India boost output by a record 30-40 million tonnes in the new financial year and ease the crippling fuel scarcity in the power sector.

The ministry, which has taken a pro-industry stance since Veerappa Moily took charge, has ruled that mines with an annual capacity of up to 8 million tonnes can expand capacity by up to 50% without holding public hearings. This exemption will apply to one-time capacity expansion in projects that do not involve land beyond the existing lease area. Several mining projects have been stalled because of the earlier provision that required public hearings if the capacity was being expanded by 25%.

The decision is a big boost for Coal India, which has been under enormous pressure to boost output as large power generation capacity is idling or underutilised because private investment led to record capacity addition in the last fiscal year while coal output stagnated.

Coal India produced about 450 million tonnes last fiscal. It has 400 mines with annual production of less than 8 million tonnes. "We are easily looking at an increase of 30-40 million tonnes increase in production in the next financial year ... the increase could be even more, but, at this stage we will study the possibility of increasing production by 50% for all mines in this category. This order will give a boost to production teams at every mine as they can increase production by 1 to 1.5 million tonnes without additional hearing," said Coal India Limited Director N Kumar.

Tuesday's order increases the ambit of an expansion that has been in place since December 2012. Former environment minister Jayanthi Natarajan had exempted existing coal mines with plans to increase production by as much as a quarter of the current permissible production levels from holding public hearings as part of the environment clearance process.

The decision to further relax the clearance process for expansion projects comes at the behest of the coal ministry, which argued that the December 2012 exemption norms were unfavourable for smaller coal mining projects. For mines with lower permissible annual production levels, a 25% capacity increase worked out to a negligible increase. Therefore, were unable to avail of the exemption from holding public hearings for getting the clearance.

Moily's latest industry-friendly move comes at a time when the environment ministry has been under attack, particularly from infrastructure ministries, for delays in clearing projects. The coal ministry has consistently maintained that these delays were primarily responsible for lower coal production. However, some experts say delays in environmental clearance is only part of the reason for Coal India's failure to meet annual production targets. Lower coal production adversely affected power, steel and other industry projects, all of which a section of the government and industry claimed was derailing India's growth. The coal ministry, in particular, has since 2009 been demanding a more liberal and pro-growth environmental regulatory framework.


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