Coal India May Soon Extract CBM

Coal India (CIL) may be allowed to extract coal-bed methane (CBM) from its leasehold mining areas soon, Financial Express has reported.

“We have given in-principle approval to a new policy on coal mine methane. We will soon move a Cabinet note to allow CBM extraction by CIL,” a petroleum ministry official said.

The newspaper said that at first, CIL may be allowed to extract gas from 80% of its coal blocks on nomination basis. However, the company will be subject to petroleum ministry regulations in marketing gas. Under the CBM policy, blocks are currently auctioned during the Nelp rounds.

With its proven coal reserves of 52.5 billion tonnes, extracting even a moderate amount of gas could significantly help CIL, since a lot of these reserves are expected to hold huge CBM potential as well.

“It is difficult to calculate gains at this juncture as everything will depend on the cost of extraction and availability of gas. At present, its too premature to estimate,” CIL chairman and managing director S Narsing Rao told Financial Express.