KOLKATA (miningweekly.com) – Breaking up an inter-Ministerial turf tussle, the Indian government has given the nod to miner Coal India Limited (CIL) to exploit coal-bed methane (CBM) from blocks under its control, subject to conditions on partnerships and collaborations.

According to a Coal Ministry official, the Petroleum and Natural Gas Ministry had granted approval for the country’s largest miner to extract CBM resources from coal blocks under its control.

Under the guidelines approved, CIL would be able to decide whether to extract only CBM from blocks or simultaneous exploitation of both coal and CBM from a single block depending on its own assessment of geological and economic viability parameters, the official said.

However, in the course of inter-Ministerial consultations, it was decided that CIL would not be permitted to contract a developer or operator for exploitation of CBM. Nor would the miner be permitted to enter into any joint venture (JV) collaboration for exploitation of the resource apart from another State-owned company.

Even in the case of JV projects with a State-owned company, CIL would have to maintain a majority equity holding in the venture and there could be no change in ownership of the coal block where the project would be implemented, the official added.

Simultaneously, CIL would have to seek a separate licence from the Petroleum and Natural Gas Ministry for the extraction of CBM even if the miner already had a mining lease for coal for the same block. Subsequent to securing the CBM extraction licence, CIL would need to submit a detailed mining plan within 24 months of receiving the licence. This condition was laid down to speed up the extraction of CBM in the country, the official said.

The issue of granting CIL simultaneous rights for extraction of coal and CBM had been hanging fire for years with the Petroleum and Natural Gas Ministry claiming sole licensing and administrative rights of CBM projects by CIL, which was under the control of the Coal Ministry.

However, on the condition of restrictions on entering into collaborations other than with State-owned companies, a CIL official said this would crimp its scope of sourcing technology partners.

He said CIL had the financial muscle and would not require a partner for funding purposes but, given the nascent stage of CBM development in the country, inducting appropriate and efficient technology without a partner would be a challenge for the coal miner.

Among the State-owned companies, only exploration and production major ONGC Limited had experience and projects in the CBM domain, he said.

ONGC Limited had two ongoing CBM projects at the Bokaro and North Karanpura coal blocks. The North Karanpura block was being developed by ONGC in partnership with CIL wherein the former had a 80% stake while the coal miner held 20%.

As reported by Mining Weekly Online last month, ONGC had sought government permission to divest part of its stake in the block to a third partner, which could offer and induct technology and best practices in the extraction of CBM.

However, in view of the restrictions imposed on CIL, it was unlikely that either ONGC or CIL would be permitted to involve private technology suppliers in any of their existing or future CBM projects, the official said.