Parliamentary committee flags high operating costs in coal mines

The parliamentary standing committee on coal and steel said that the issue of high-operating costs of coal mines run by the PSUs requires the Union coal ministry’s “serious consideration”.

During FY19, the lowest operating cost of an open cast (OC) mine owned by Coal India Ltd (CIL) was Rs 455.5 per tonne, while the highest cost was pegged at Rs 1,889 per tonne. For underground (UG) mines, operating costs ranged between Rs 4,879.8 and Rs 27,051.5 per tonne.

Flagging the variation in the operating cost of OC and UG mines, the committee noted that the measures taken by the coal companies have not been successful in bringing down the operating cost in OC and UG mines.

To bring down operating costs, CIL is converting the unsafe and unviable UG mines into OC mines. The company has also deployed heavy earth-moving machinery in OC mines for coal extraction, and also conducting e-reverse auction for explosives, it informed the committee.

Pointing at the under-utilisation of CIL’s capital expenditure funds in FY19, the committee instructed the coal ministry and the company to identify the factors responsible for underutilisation of plan outlay and take the remedial action. CIL spent Rs 7,311 crore on capital expenditure in FY19, which was less than 77 per cent of the target. The company cited the reasons such as law and order problems, delays in land acquisition and environmental clearance receipts. “The Committee feel that these constraints are not new to CIL,” the report tabled in the parliament said.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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