KOLKATA (miningweekly.com) - India has decided to explore the development of greenfield coal blocks as a pilot project under a private-public partnership (PPP), which would form the basis for an expert panel to evolve a framework for transparent collaboration between government and private investors.

A committee has been set up under the secretary to the Coal Ministry to outline the contours of a PPP for the development of the coal blocks, according to the Indian government’s interim federal Budget, presented to Parliament on Monday.

An unexplored greenfield coal block, part of the Mahanadi coalfields, in eastern India, would be taken up as a pilot project and would be developed through collaborative private and government investment. The parameters of the project would provide inputs for the model PPP framework.

A PPP model outlined by the Planning Commission would also be further analysed against views and comments from all stakeholders in the coal mining sector, the paper said.

However, the primary mandate of the panel would be to legally reconcile coal mining through a PPP with India’s Coal Mine Nationalisation Act, which permitted coal mining exclusively by the government.

According to an official in the Coal Ministry, the mandate of the panel would be to find ways to insulate private investments in coal mining from legal challenge, as the nationalisation legislation did not permit private coal mining except for captive consumption.

The PPP pilot project was a follow-up from the announcements made during the federal Budget presentation last year, wherein the government had stressed the imperatives of private sector collaboration with Coal India Limited (CIL) to reduce the country’s rising import dependency for coal.

CIL, which accounted for over 80% of domestic coal supplies, had been missing its production targets for successive years. In the current year, the miner was expected to achieve production of 475-million tonnes against a target of 482-million tonnes.

In 2012/13, CIL was able to produce 453-million tonnes against a target of 464-million tonnes.

For 2014/15, the miner had pruned the production target by 23-million tonnes to a level of 507-million tonnes, against a more optimistic target of 530-million tonnes set earlier.

India imported 146-million tonnes of coal during 2012/13 and forecast this to rise to 185-million tonnes during 2015/17.