Govt should create fund for firms buying coal mines abroad: PwC
New Delhi: In view of India's growing need to import coal, global advisory firm PricewaterhouseCoopers (PwC) has suggested that the government consider creating funds to help companies acquire overseas assets.
"The government may consider creating funds to support overseas acquisition to supplement domestic resources. This is required since mining is a capital intensive industry," PwC said in a report -- The Indian Coal Sector: Challenges and Future Outlook.
The need for such government-sponsored funds also arises from the fact that mining projects often require investment in supporting infrastructure, which is more capital intensive than the mining job itself.
The Working Group on Coal and Lignite for the 12th Five- Year Plan projects country's coal demand to grow at a CAGR of 7.1 percent till 2016-17 to stand at 980.5 million tonnes.
PwC said the current coal shortage of 84 million tonnes per annum (mtpa), may go up to 300 mtpa in the medium-term.
It also said that India needs to establish single-window clearance process for coal mines.
It said government needs to offer coal mines with secured clearances as that would help increase in domestic production and ensure more industry participation in the coal sector.
The advisory firm also said the government should consider commercial sales of coal by the private developers through a suitable framework. Currently, commercial sale of coal is allowed for the government companies only.