From Our Special Correspondent
Daijiworld Media Network - Bangalore
Bangalore, Oct 10: With the Supreme Court seized of the issue of illegal mining and ordering e-auctioning of iron ore for steel mills after its decision to ban all mining activities in Bellary, Tumkur and Chitradurga districts of Karnataka and a CBI probe presently underway in Karnataka and Andhra Pradesh, the focus now seems to be on the utilization of natural resources, especially minerals.
The Federation of Indian Chambers of Commerce and Industry (FICCI) , the highest body of trade, commerce and industry, has voiced a demand for ''transparent and market-based" rules for the allocation of natural resources, particularly minerals.
FICCI President Harsh Mariwala, who addressed the media in Bangalore on Monday, said there was an urgent need to introduce greater commercialisation and competition in the coal industry.
He said productivity in the Indian coal industry is one-tenth of levels prevailing in the United States and availability of coal was of crucial importance for the optimum functioning of thermal power plants and generation of energy besides operation of Indian Railways and many other industries.
Indian coal imports increased from 59 million tonnes in 2008-09 to 89 million tonnes in 2010-11, an increase of 51 per cent. Imports of coal in 2010-11 were valued at Rs. 37,000 crores, he observed.
Mariwala attributed the sharp increase mainly to the failure of the state-run mining companies to increase output to match demand, especially from power utilities.
''The Government should immediately implement the recommendations of Ashok Chawla’s Committee Report which has looked into the issue of allocation of natural resources in great detail and suggested transparent mechanisms, Mariwala said while stressing the need to look even beyond these recommendations in order to have more effective rules and regulations.
Mariwala warned that the ban on iron ore mining in Karnataka has had ''a crippling effect" on not only the steel industry but also on other industries that are dependent on steel.
He said the relief and rehabilitation provisions of the Mines and Minerals Development and Regulation bill will impose higher costs on mining companies.
There is a need to introduce commercial mining in the coal sector through competitive bidding which would ensure that India’s productivity of coal mining increases. Currently, under the Coal Mines (Nationalisation) Act, 1973, the Central Government, a Government company (including a State Government company), a Corporation owned, managed and controlled by the Central Government can do coal mining without the restriction of captive use. Whereas, a private company can only do captive mining as per the Act, he said.
Unless, commercial mining is allowed and greater competition introduced, India’s coal productivity will not increase and India will continue to be a net importer of coal. India’s coal imports have increased from 59 million tonnes in 2008-09 to 89 million tonnes in 2010-11.
In 2009-10, India imported coal worth Rs 37,000 crore. “Substantial reliance on coal imports is unsustainable in the long run; the current productivity in coal mining in India is one tenth of the US, which is the second largest producer of coal," Mariwala noted
FICCI Secretary General Rajiv Kumar said if coal imports grow at their current rate, India will soon import 200 million tonnes per annum.
''Countries like Indonesia and Australia have already decided to index coal export prices to inflation rates, which will result in imports becoming costlier," he warned. “About 20,000 MW of capacity, which was based on earlier cost estimates, will become unviable," he remarked.