Millennium Post

OilMin may move Cabinet to let private firms mine CBM

After allowing Coal India Ltd to produce natural gas from coal seams (CBM), the Oil Ministry is proposing to give licence to other public and private sector firms to produce CBM from their existing coal mines.

The government had in December last year allowed only CIL, the world's largest coal miner, to explore and produce coal-bed methane (CBM) in its existing coal mines. With a view to capture CBM from all available coal bearing areas, the ministry is now moving the Cabinet again to bring all coal mining areas held by not just CIL but other PSUs, joint ventures and private companies as well under this framework, sources privy to the development said.

This would enable degassing of coal seams ahead of coal mining operations and capturing it for commercial use. Also it will help bridge the gas deficit in the country.

Towards this, the ministry is proposing that all CBM rich coal seams, irrespective of depths, including areas planned for coal mining, be allowed to produce the fuel. In addition to payment of royalty to respective state governments, coal companies would be required to pay a production level payment of 5 per cent, they said.

Sources said the Coal Ministry is opposed to allowing miners other than CIL for exploitation of CBM, which is natural gas found in coal seams. The ministry is proposing that where mining lease for extraction of coal has been granted, the rights for extraction of CBM should also be available with the operator. For areas where a CBM exploration or mining licence has already been granted, Coal Ministry should refrain from allotting coal blocks in that area.
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