Sanjeev Aggarwal Amplus Infrastructure Developers Private Limited Clearances and Land Acquisition for Coal Blocks Way Forward to Meet Demand of Coal

2 India’s peak power demand in 2017 is expected to be ~199GW 2 …and Installed Capacity requirement to ~266 GW by 2017 Projected Power demand and Installed capacity requirement Source: CEA, 17th EPS, IEP, Planning Commission, KPMG Analysis

3 Of this, ~83 GW is expected to come from Thermal power plants and Coal is likely to be the dominant fuel source 3 Maximum addition is likely to be in Thermal power plants (~83 GW) Coal is the dominant source of Fuel (~70 GW) Coal power plants by source of Coal Capacity addition by fuel type Most of the planned coal plants use domestic source (Linkage or Captive); 22% of the capacity addition is based on Imported coal 70 GW capacity of Coal based power plants to be added by 2017 Capacity of Coal based power plants Source: CEA, Infraline, MoP, KPMG Analysis

The significant linkage between power and coal  Coal to remain as the mainstay of Indian power capacity addition  Given the price difference between Indian and imported coal, huge demand for Indian coal  Coal India falling majorly short of meeting the demand and pressure mounting on the coal companies to increase supply (by reducing e-auction, pit-head stocks, etc.)  Why is that coal companies are unable to meet the demands of its customers?

The significant linkage between power and coal  Development of the coal blocks has become a challenge both for the economy as well as for the industry.  Though available in plenty below the ground, is not available to meet the requirements of the growing economy leading to tremendous loss.  The issues that have really pushed back the efforts are land acquisition and various clearances. And the issue is common for Coal India and the captive mining companies.

Land Acquisition  Even after award of the mining license, the land acquisition process remains a big challenge  Revenue land (non-forest)  Private land  Forest land  Issues range from private land prices, rehabilitation, rights of forest dwellers and so on…  The government need to enforce its Eminent Domain right at least for the land that holds natural resource and complete the acquisition process in a timely manner

7 Environment and Forest Clearance  Recent issue of forest clearances: Category A / B is the biggest bugbear for most of the coal mine owners:  Huge investments incurred / planned based on government allocation of coal mine.  Discussion at the top levels in the GoI over last 2 ½ Years; still uncertain on what can be cleared  Now, we believe that GoM has finally decided to do away with the Go/ No-Go policy  Any change of policy retrospectively or uncertainty in the same is the single largest measure that impacts investments in a growth economy.  Latest policy of MoEF to not grant environmental clearance till the forest clearance is obtained will further add on to the timelines

How can we do it better?  Forest clearances: With the curtain drawing on the Go/ No-Go issue, we expect hat the forest clearance will be much more timely and systematic  Avoid linking of environmental clearance with forest clearance  The new land acquisition bills/ rules can provide for compulsory land acquisition for areas bearing natural resources  Provide PL immediately to all pending applicants along with the permission to prospect in forest areas – prospecting need not involve any forest loss.

Increasing the production for the future..  Coal Block allocation through competitive bidding is the next step:  Avoid the issues of environment and forest clearance by pre-screening the blocks  Increase coal production through involvement of real mining companies and avoid squatters that may hold on the resource  Avoid speculation by providing as much data as possible  Up-front premium just increase the speculation premium rather than bringing in real efficiencies  The long expected coal regulatory system can take care of the concerns about excessive profiteering by the mining companies  Result: The coal will be available in plenty, to all the needy, and at the right cost.

Thank you