The Hindu : Business : LN Mittal keen to forge alliance with CIL

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LN Mittal keen to forge alliance with CIL

Indrani Dutta

Writes letter to the Union Coal Minister

Study to assess number of abandoned coal mines
Action plan formulated to rehabilitate the people

KOLKATA: Steel tycoon L. N. Mittal is keen on entering the coal mining sector in India which is now gradually opening up.

A few days back, the group sent a letter to the Union Coal Minister stating its intent on tying up with the coal major Coal India Ltd (CIL), which produces over 84 per cent of the country’s coal. It may be mentioned here that recently Mr. Mittal who spent his early days in the city, had visited West Bengal Chief Minister, Buddhadeb Bhattacharjee, expressing his desire to make investments in the State.

Efforts to reach Mr. Mittal at his London office proved futile. When contacted his office said that they had no such information. However, the news was confirmed to The Hindu by a senior official in the Union Coal Ministry. “We have received a letter from the group which is keen on participating in a joint venture on abandoned coal mines of CIL,” he said, adding that the comments of CIL have been sought on the matter.

CIL Chairman, Partha S. Bhattacharyya, refused to comment on this matter.

However, it was learnt that the issue of abandoned mines was discussed at a meeting of the research and development apex committee of CIL, held at the corporate headquarters earlier this week. Even as a fact-finding mission has been launched to assess the number of such mines under CIL, sources said that many mines were abandoned on safety grounds after nationalisation, while in some cases mines abandoned today are revisited at a later date in case economics improve.

Coal mining in India has a history of over 200 years and often it was found that mines were closed down after slaughter mining in the pre-nationalisation days without taking proper measures on decommissioning. This had resulted in unauthorised activities at the mines where clandestine mining takes place leading to subsidence. This has posed social and environmental problems.

CIL share

Sources said that a study was now being done by CIL to find out the number of coal mines and also the reserves that they carry of thermal coal or coking coal.

Although CIL’s share is set to fall in the reforms era, it would still remain the single largest coal mining entity in India and the world. Of late many corporate bigwigs have been reaching out to the PSU seeking to strike joint ventures.

This includes Reliance Industries which had shown interest in setting up a coal liquefaction project.

For the Mittals, however, such an engagement may carry other significance. The group has announced its intent on setting up steel plants in eastern India where much of the coal deposits lie. Jharkhand and West Bengal are two of the biggest concentration of good quality coal and the only source of prime coking coal. The issue of the huge reserves of five billion tonnes of coking coal which lie trapped beneath the Jharia coal belt is also significant.

A Rs. 6,000 crore action plan has been formulated which will be needed to rehab the people now staying in these areas and also to control the mine fires that rage in many of these mines burning up prime coking coal, most of which the Indian steel industry imports now at a very high price.

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