Center for integrating CIL’s FMC and rail projects into the national monetization pipeline


The standards for the final round of auction selling 88 coal mines reduced the upfront payment and would adjust the upfront amount against the royalties.

The Center would aggressively bring the coal industry under the national monetization pipeline, even if it relaxed standards banning coal blocks, wanting them to be handed over to qualified bidders, without risk.

Coal Secretary Anil Kumar Jain said the government plans to monetize First Mile Connectivity (FMC) and rail projects, which CIL is developing solely or through joint ventures. “FMC should be outsourced, we are for outright sale of CERL (Chhattisgarh East Railway, a company of CIL, Chhattisgarh Railways and Government). It needs to be monetized. CIL should be submitted to NMP, ”Jain said.

CIL has earmarked Rs 14,000 crore in two phases by 2025 for FMC projects and Rs 19,650 crore for rail projects by 2024 to improve the evacuation of increased coal production.

Jain, at the Minerals, Mines and Metals e-Conclave of the Bengal Chamber of Commerce, said that although India’s mining and minerals sector has fallen into some uncertainty over the outcome of the COP-26, the sector, in particular the coal sector, has also seen positive turns with the latest round of coal mining auctions which received responses from bidders.

“The current round, for which today (Thursday) was the last application date, received two or more bids for 18 mines we proposed. Some were old mines, but there was interest in adding additional new mines, ”Jain said, adding that this was seen as a positive turning point since the previous cycle did not receive much response like the ‘made the first round of the auction.

The standards for the final round of auction selling 88 coal mines reduced the upfront payment and would adjust the upfront amount against the royalties. While 100% FDI has been allowed through the automatic route, the government has also relaxed the efficiency parameters for operational efficiency. The new auction module has designed reasonable financial terms and a revenue sharing model based on the national coal index.

Jain said coal gasification revenue sharing has been increased to 50% from 20% previously.

Naveen Jindal, chairman of Jindal Steel and Power Ltd, said that although many initiatives have been taken to reform the mining sector, there should be a one-stop-shop mechanism to obtain all permissions. India, which holds the fourth largest coal reserves, should create an enabling environment for the exploitation of the reserves by lowering tax burdens and ensuring that the competitiveness of Indian entrepreneurs does not erode.

However, the uncertainty on the sector, for the outcome of the COP-26, would gradually recede with the establishment of a roadmap by all stakeholders to accomplish India’s commitment to be net-zero by 2070. A carbon budget was needed along the lines of the UK when it decided to cut fossil fuel use in 2007, Jain said. Europe’s proposal to impose a Cross-Border Adjustment Mechanism (CBAM), which means imposing taxes on imports from coal-heavy countries would hurt India, but “we’ll have to answer to our environmental concerns without compromising our economic objectives, ”he said. .

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