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India's coal projects face obstacles
by Staff Writers
New Delhi (UPI) Sep 12, 2011

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India's increasing energy needs are being hampered by regulatory delays for coal mining projects.

India could import around 250 million tons of coal a year by 2015, more than double import levels this year, says Indian Coal Minister Sriprakash Jaiswal. Coal accounts for approximately two-thirds of total energy production in India.

Although India has the fifth-largest coal reserves in the world, much of it is under forests and so mining projects face fierce environmental scrutiny.

When the Environment and Forests Ministry declared 203 coal fields a "no-go" zone this year, the decision was applauded by environmental groups. Yet many officials opposed the move, citing India's soaring energy needs vital for its industrial growth.

"Never before have we had such a high demand for coal," said Jaiswal, The Washington Post reports. "And never before has our environmental consciousness been so high either. Both are legitimate worries. But the solution is not to clamp down on coal production."

For state-run Coal India, which operates 470 mines accounting for more than 80 percent of the country's domestic coal production, 233 projects are being held up because of regulatory clearances, including environmental approvals, Press Trust of India reports. At stake is an additional 200 million tons of coal a year.

"It takes about seven years for us to get environment and forest approvals to start mining in India. Can we afford to wait that long?" the Post quoted U. Kumar, a coal adviser to the Confederation of Indian Industry, as saying.

A hoped-for domestic production target of 660 million tons of coal is likely to fall short by 139 million tons this year due to new regulations and licensing delays, including environmental controls. That shortage means that dozens of power plants will be idle next year.

"We have already sunk over $600 million in expanding our power plant and steel factory because we expected an assured coal supply from the mines," said Sridhar Tripathi, consultant to Madanpur South Coal Co.

"So much hue and cry over the forest. Coal is nature's treasure. We are willing to replant 26 times the trees we will cut. But we can't shift the coal field to another area."

Meanwhile, Indian power companies have been dealt a blow by Indonesia's coal export regulations which prohibit the sale of coal below a benchmark price based on international rates.

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