PMO wants a regulator for coal

New Delhi: The PMO has pressed the coal reforms button as the US nuclear deal hangs fire and black diamond is projected to remain the primary source of energy in the near future. At a recent meeting, PM’s principal secretary T K A Nair asked the coal ministry to ‘‘bring forth a proposal to set up a regulator’’, set year- and institution-wise exploration targets ‘‘so that adequate blocks are available for development’’ and move towards a modern pricing regime.
Coalmining for commercial sales is out of bounds for private players and the government decides the price and quantities to consumer industries from state-owned monopoly Coal India’s production. However, both producing and consuming industries feel enough market dynamics exist by way of exposure to international prices to warrant a regulator. Lower international coal prices or a reduced duty regime results in a reduced domestic coal offtake, hurting home producers, as happened in the early nineties.
Besides, with private entry in captive coalmining, a regulator is needed to ensure level field and see to it that new players do not cut corners and take care of conservation, deploy suitable technology and offer the same welfare facilites that miners get under government-run operations. A regulator is also expected to ensure a fair evaluation of coal blocks being allotted to private companies for captive mining. The PMO has also directed to move towards a pricing regime based on the gross calorific value (GCV), the global practice, of coal from useful heat value (UHV).