West Bengal Chief Minister Mamata Banerjee, on Friday expressed her reservations on allowing 100 per cent foreign direct investment (FDI) in the coal sector and asked Prime Minister Narendra Modi to reconsider the decision.

In her letter, she reasoned that since the global focus was now on renewable energy and sustainable energy sources, FDI was not likely to attract investors as projected by the Centre and neither would it pave the way for any technology transfer to India from foreign shores.

“This policy can neither bring in FDI, nor can it bring technologies or knowhow which we are unable to access today. The recent trend and empirical evidences clearly showcase th interest of global investors more in renewable energy projects as compared to the coal mining projects. In fact, research suggests that about 100 global financial institutions have divested their thermal coal investements. Therefore, FDI in coal is a far cry”, Banerjee said in the letter.

For example, the $ 7 trillion BlackRock, the world’s largest fund manager, has decided to divest all of its thermal coal exposure to put sustainability in its core of investment decisions, while the $ 52 billion Australian supergiant Hexa – a superannuation fund for workers in health and community service sectors, has divested its holdings in thermal coal companies with its commitment to 'net zero' emissions across the its entire portfolio by 2050.

Moreover, Banerjee said that FDI in the coal sector is against the spirit of Atmanirbhar Bharat or self-reliant India as it will demean the capability of state-owned behemoth Coal India – the world’s largest coal miner which has cash reserves in excess of Rs 31,000 crore and had earned a whopping Rs 27,000 crore net profit in 2018-19. It controls 80 per cent of the coal market in the country.

However, Coal India is of the view that as foreign companies enter India and start domestic production, it will help in reducing imports.

Moreover, Pramod Agrawal, chairman at Coal India, maintained that commercial coal mining will not compromise Coal India’s position as the primary coal producer in the country or adversely impact the production or profitability of the company.

Currently, Coal India, the largest holder of coal resources in the country, has 447 coal blocks, mostly explored, under its disposal. In addition to these, 16 more blocks were allocated to this Maharatna company – 10 under Coal Mines (Special Provision) Act and 6 under Mines and Minerals (Development and Regulation).

The combined capacity of these 463 blocks is close to 170 billion tonnes (BTs).

Banerjee’s observations comes at a time when workers in Coal India have decided to go for a three-day strike beginning July 2 to protest against the Centre’s decision of opening coal mining to the private sector.

Moreover, the Jharkhand government has also moved to the Supreme Court challenging the Cente’s decision of allowing private players to hold coal reserves. In its plea, the Jharkhand government has asked for postponement of commercial auction of coal mines. It reasoned that the move would adversely impact the huge tribal population in the coal mining belts and the vast tracks of forest land and has suggested a fair assessment of the social and environmental impact.