India, U.S. Pursue Coal Alliance

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"India's coal shortage is expected to measure 85 million tons by end of 2011–12."

After the civil nuclear agreement, India and the U.S. are pursuing an alliance in the coal sector. Both countries are considering encouraging equity partnerships with offtake in expansion projects.

India is expected to produce 447 million tons of coal by the end of the 11th plan and 633 million tons by end of the 12th plan. According to Center's estimates, the coal shortage is expected to be 85 million tons by end of 2011–12.

The alliance is crucial to tackle constraints in exploration of coal. Of 277 billion tons geological reserves, only 110 billion tons reserves are in proven. Besides, there are problems and constraints in underground mining, mainly because of use of old technology, and labor-intensive processes and safety issues.

A coal ministry official told Business Standard, "In equity model, it is proposed to acquire stakes in operating mines or greenfield coal blocks and import produce from such acquisitions to India. In the off-take model, it is proposed to enter into long-term offtake contract (10 years) with coal companies for procurement of imported coal. U.S.A. has been identified as a preferred country for both the equity and off-take models."

The official argued: "Thermal coal exports from the U.S. at a competitive price can potentially bridge India's demand-supply gap."

The U.S. may come up with new technologies and expertise to take part in mechanization of UG mines.

India and the U.S. are also looking at financing of capacity building and skill development in the area of geospatial technology application in mine land reclamation for sustainable coal mining in India.

Funds can be available to develop core competence of technical experts through training and site visits to make them capable of taking inferred decisions for addressing land reclamation challenges.

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