KOLKATA (miningweekly.com) - The Indian government would not initiate any immediate move towards restructuring Coal India Limited (CIL) to avoid jeopardising the transfer of coal blocks that were earlier cancelled by the Supreme Court.

The Indian government mandated global consulting firm Deloitte in 2013 to undertake a review of current management and operations of CIL and to recommend an organisational restructuring to increase management efficiency and faster decision-making, against a backdrop of slow growth in coal production.

The consultants submitted a report to the government recommending hiving off the wholly owned subsidiaries under CIL into independent mining companies with specific geographies under each entity.

While the holding company structure of CIL would be dismantled, each independent operational company would start off with a production base of around 100 t/y and would be imbued with greater flexibility in operations and management, the consultant had recommended.

However, according to a Coal Ministry official, the government was not keen to initiate any drastic restructuring as suggested by the consultants as it would be not only time consuming but also risk uncertainties at a time when the government and the Ministry was focused on getting the coal sector back on the rails, after the Indian Supreme Court cancelled 214 coal block allotted to various investors since 1993.

The government last week set up a high-level inter-Ministerial committee to handle the reallocation of the coal blocks cancelled by the apex court. The committee comprised nine members, representing Ministries such as coal and user industries such as power and steel, and was mandated under the Coal Mines Special Provisions Ordinance 2014.

Simultaneously, the government had also directed CIL to prepare a comprehensive plan, including the management and operational aspects of 42 coal blocks that were already in production, but the licences of which had been cancelled by the court, with CIL directed to take over the blocks from April 1, 2015.

The government was also working to kick-start auctions of the coal blocks starting with 74 that will be put on the block from December to January. Power companies which were not successful in securing captive coal blocks through the competitive bidding route, but which had already completed construction of power plants or were close to it, would be given priority for coal supplies from CIL, the official said. These were the immediate priority of the government with CIL to play a major role.

The Coal Ministry would be averse to any organisational changes in CIL as recommended by the consultants. Such suggestions would in any case face strong opposition from executive level employees as well as workers in the mining company, the official said.

CIL, the world’s largest coal miner, producing 462-million tonnes a year and accounting for over 82% of domestic supplies, operated through seven wholly owned mining subsidiaries, such as Eastern Coalfields Limited, Bharat Coking Coal Limited, Central Coalfields Limited and South Eastern Coalfields Limited, along with the in-house consultancy subsidiary of the Central Mine Planning & Design Institute Limited.