Government has no desire to fully exit Coal India, says Goyal
A day after a cabinet panel approved a 10 percent stake sale in state miner Coal India, Coal and Power Minister Piyush Goyal Thursday said the decision was not a half measure and the government has no desire to fully divest its assets in the company.
New Delhi: A day after a cabinet panel approved a 10 percent stake sale in state miner Coal India, Coal and Power Minister Piyush Goyal Thursday said the decision was not a half measure and the government has no desire to fully divest its assets in the company.
"The Coal India disinvestment decision is not a half measure and the government does not wish to fully exit the company," Goyal said at the Economist India summit here.
Moreover, the Supreme Court's decision on the coal allocation issue will help re-orient the state miner which has near-monopoly of coal production in the country, the minister added.
The apex court Tuesday reserved its order on deallocating coal blocks it had earlier declared to have all been made in an illegal manner between 1993 and 2010.
The Cabinet Committee on Economic Affairs (CCEA) Wednesday approved the disinvestment of 10 percent of government held equity out of its shareholding of 89.65 percent.
"The decision to disinvest would help the government realise an optimum price for the offer for sale of 10 percent of its shareholding in the company," a CCEA release said.
This disinvestment is expected to fetch the exchequer about Rs.23,000 crore.
The authorised capital of Coal India is Rs.8,904.18 crore, of which the issued and subscribed equity capital, as on March 31, is Rs.6,316.36 crore.
After the disinvestment, the government's holding in the company would come down to 79.65 percent.
The world's largest coal miner, which has set a production target of 507 million tonnes (MT) for 2014-15, is hoping to increase its annual production by 10-20 MT this fiscal, Coal India chairman A.K. Dubey told media persons Wednesday on the sidelines of the company's 40th annual general meeting in Kolkata.
Coal India, which accounts for 80 percent of domestic coal production, missed its output target of 482 MT for 2013-14, producing 462 MT during the period.
In 2012-13, the company produced 452.5 MT of coal, falling short of the 464 MT target.
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Prime Minister Narendra Modi's government has asked Coal India, the world's largest miner of the fuel, to more than double its output to 1 billion tonnes by 2019 to feed existing and upcoming power plants.<br />
The world's biggest coal miner has struggled to raise output fast enough to meet rising demand from power companies, making India the world's third-largest coal importer despite sitting on the fifth-biggest reserves.<br />
Goyal said that in order to ensure adequate availability of fuel to power utilities, Coal India Ltd has been asked to enhance production of domestic coal and the power utilities have also been advised to augment import of coal.