The Ministry of Coal’s ambitious project to convert coal into liquid fuels and others has run into a hurdle
Inter-ministerial group says it is not suited for local high-ash coal
NEW DELHI: The Ministry of Coal’s ambitious project to convert coal into liquid fuels and others has run into a hurdle with the inter-ministerial group questioning the available technology’s capability to process Indian high-ash coal and to operate at the proposed massive scale.
India’s 22 business conglomerates, including the Reliance and Tata groups, had applied for coal blocks with combined estimated reserves of six billion tonnes for captive use, with capital expenditure pegged at about $8 billion, following an invitation by the coal ministry.
“One of the members of the inter-ministerial group, in the meeting to discuss the project, asked if there was surety whether the technology available abroad can be applied to Indian coal, which has very high ash content,” a government official told DNA Money.
The inter-ministerial group, constituted to screen the applications and business cases, met last week.
The consortia interested in the project had made their business presentations in October. The companies had teamed up with foreign corporations to source technology, as mandated by the ministry.
The companies engaged in coal-to-liquid projects abroad have so far processed coal with ash content at about 22%-25%, whereas, the coal to be made available in India for this project has ash content as high as up to 40% or even more, the official said.
Moreover, Ministry of Coal, in its invitation for applications had proposed that a 1.5 billion tonnes coal block would enable mining operations of 28-31 million tonnes of run-of-mine coal per annum for 30 years, in turn producing about 3.5 million tonnes of oil and oil products annually.
The companies engaged in coal-to-liquid fuel projects abroad have yet to prove that their technology is capable to produce about 80,000 barrels of oil a day, roughly 100 times the amount they are producing at present, the official said.
Reliance Industries Ltd’s partner, US-based Headwaters Energy Services, has been working on a similar project in India for last four-five years with Oil India Ltd. It has been successful in producing liquid fuels from low-ash Assam coal procured from Coal India Ltd. The company, however, used direct liquefaction technology, which requires the coal to be with low ash content.
Most of the companies engaged in coal-to-liquid projects are learnt to have derived the technology from South Africa’s Sasol Ltd - world’s largest producer of liquid fuels from coal - which has partnered with the Tata group for the project.
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