Coal India Extends CBM Tender

A turf battle between the key Union Ministry of Coal and the Union Ministry of Petroleum and Natural gas has forced Coal India Ltd (CIL) to extend the August 17th tender deadline for receiving bids for extraction and commercial utilisation of coal-bed methane (CBM) from five mining assets.

The tender was slated to pave way for extraction of nearly 25 billion cubic metres of CBM and ensure safe underground mining of over 100 million tonnes of medium-grade coking coal in Jharkhand.

High concentration of gas has made underground mining “unsafe” in the identified assets.

According to sources, while the Coal Ministry has extended its tacit approval to CIL on the issue, the company was yet to receive any formal clarification on closure of the tender and awarding the same as per schedule.

CIL invited private players to invest in extraction of gas and sell the same in the open market to ensure returns and was slated to get a share of the profit from sale of gas.

The Ministry of Petroleum and Natural Gas felt that the tender was overlapping in nature with CBM Policy and, should not be awarded without the requisite approval from the upstream regulator. The Coal Ministry was also urged to take Cabinet approval on the issue.

The Coal Ministry, however, felt that the ambit of the CBM Policy does not include the CIL leasehold area. According to the Mining Act, there was no space for a second “licensee” in a particular mining leasehold area.

It is understood that the Coal Ministry was yet to submit any proposal for cabinet committee's consideration in this regard.