CIL to invest Rs 2,500 cr in washing coal: Survey

Coal India Ltd will invest about Rs 2,500 crore (Rs 25 billion) to set up 20 coal washeries with an annual capacity of 111.10 million tonnes to reduce the ash content of the domestic coal, the Economic Survey said on Thursday.

"For increasing the output of washed coking coal and non- coking coal, CIL has envisaged setting up of 20 new coal washeries for an ultimate raw coal throughput capacity of 111.10 million tonnes per annum with an estimated capital investment of about Rs 2,500 crore," the pre-budget Survey tabled in Parliament said.

The proposed units comprise seven coking coal washeries and 13 non-coking coal washeries.

The time frame to set up such units was not mentioned. Firms wash coal to reduce its ash content and improve the calorific value.

The average ash content in Indian coal is 35-38 per cent. Washing helps reduce it by 7-8 per cent.

Moreover, to bridge the domestic demand-supply gap of the raw material, the government has approved the formation of International Coal Ventures Ltd -- a special purpose vehicle formed to scout for coal properties abroad -- with CIL as one of its five members, it added.

"The Empowered Committee of Secretaries constituted for considering the proposal of ICVL for acquiring coal properties abroad will also consider CIL's proposals for investing in coal assets abraod which are more than Rs 1,000 crore (Rs 10 billion)," it

The demand-supply gap for coal in the country is estimated at around 70 million tonnes for the current fiscal and is forecast to double in the next two years.

Moreover, the Survey said, the country's largest coal producer is in process of forming joint ventures and engaging sophisticated equipment and technology to increase production from underground mines.

Also, to meet the captive requirement of consuming industries like power, cement and steel, the Survey mentioned that as many as 208 coal blocks have been effectively allotted to such user companies.

"Out of the 208 coal blocks allocated, 95 with geological reserves of about 27,388 million tonnes have been allocated to public sector companies and the rest to the private sector companies," it said, adding that 25 such blocks have been bought into production so far.

"The production from these coal blocks during April- November 2009 was 23.66 million tonnes," it said.

To stymie supply hurdles, coal pilferages, CIL offered 37.13 million tonnes of coal through e-auction to consumers in April-December 2009 but was able to sell about 30 million tonnes.

Other PSU Singareni Coal Colleries Ltd sold about one million tonnes of coal through e-acution during the period, the Survey said.

Overall, coal production in the country saw a jump of 12.5 per cent to 325.87 million tonnes during April-November 2009 as against the year-ago period, it added.