Coal India gets assurance to fully exploit mines

Coal India, whose $3.5 billion IPO opens on Monday, has received assurance from Indian prime minister's office that it could fully exploit its coal reserves, which were earlier constrained by the environment ministry, the Financial Express reported on Saturday.                                            

The environment minister had issued a directive that designated about 40% of the company reserves as "no go areas" for mining, the paper said.                                           
 

The environment minister proposed the prohibition to stop large-scale felling of forests. This could have impacted Coal India's production substantially, it said.                                           

"The prime minister's office had intervened," a senior company official, who declined to be identified, told Reuters over the telephone on Saturday.                                           

"We are confident our projects will get the clearances."          

Around 115 of Coal India's projects were awaiting forest clearance from the environment ministry, chairman Partha Bhattacharyya had told reporters in Mumbai earlier this week.                         

Coal India, based in the eastern city of Kolkata, produced 431 million tonnes in 2009-10, accounting for nearly 80% of Indian coal output.                                           

The miner, founded in 1973 when the government nationalised many coal mines, made a net profit of Rs98.3 billion ($2.2 billion) in 2010 fiscal year and expects that to grow 25% in the year to March.