The coal ministry these days is in the action mode. After the PMO pushed for coal supplies to the power projects – crucial to meet the power demand, which in turn is crucial for higher economic growth, the ministry is exploring every possibility to improve coal production across the country.

Aiming to assure 80% coal supply to nine new power projects, the ministry has outlined a new production plan in order to meet the demand of the coal, say ministry officials. It is also considering scrapping the fuel supply agreements (FSAs) with previous power projects.

It had signed 100-110% of FSAs with most of the power projects. But now it is likely to reduce FSA limit to 80-90%, a move that would save at least 35 million tonnes of coal from earlier power projects.

As differences of opinion between the coal ministry and the environment ministry have been affecting coal production, the efforts are also on to work with better coordination, the officials say.

All the concerned ministries are taking initiatives to improve the coal production and to assure 80% FSAs with all the new power projects.

The action comes after Pulok Chatterjee, principal secretary in the prime minister office, briefed all the ministries to improve the coal production and their settle their internal disputes.

The coal ministry has already submitted a list of 120 new projects for coal mining, which will significantly improve the coal production. Chatterjee is looking into the matter and officials are hopeful all the 120 projects will get the PMO nod very soon.

The renewed action on the coal front comes after the prime minister’s meeting last month with power producers including Ratan Tata, Anil Ambani, Anil Aggarwal, Gautam Adani and Shashi Ruia. The corporate leaders requested the prime minister to ensure adequate coal supplies for their projects and the PM promised them to do the needful.

Public sector unit Coal India Limited is producing 440 million tonnes of coal, which leaves a deficit of 160 million tonnes. The production of CIL is also stagnant from past two years. In order to meet out the coal demand, either CIL will have to import around 160 million tonnes or the MoEF will have to clear at least 25% of ‘No Go Area’ projects, coal ministry officials say.