The push to allow more private miners to develop India’s coal reserves is largely motivated by regular power shortages and a lack of transparency and efficiency in the majority state-owned miner.

Indian utility giant Tata Power has been outspoken on the issue, telling Reuters that a 464 million ton coal production target and a 15Mt import plan for 2012-13 will not fix the problem.

“Why should Coal India, a mining company, be in the business of importing coal – something needs to be done so that more is produced in the country,” Tata executive Amulya Charan was quoted as saying.

“Coal India's monopoly needs to be broken, private mining firms need to come in and start producing from its reserves, the sector needs to be opened up to some competition.”

These comments come as government attempts to open the industry slowly come into focus with the confirmation that coal blocks will be open to auction rather than simply allocated without public notice.

The Hindu yesterday reported that Coal India would have to pay the reserve price for acquiring blocks from auction as would any other bidder.

Coal Minister Sriprakash Jaiswal said the motive of the auctions was to mine more domestic coal and not depend as much on imports.

The ministry’s recent coal pricing reassessments, transparency measures and regulatory bill to address inefficiencies have not addressed industry proposals for opening up coal more broadly.

“Private miners would have a different approach and would bring reserves into production more quickly,” Charan told Reuters.

According to the World Coal Association, India is the world’s third largest producer, having output of 538Mt in 2010.

Coal India accounts for 80% of the country’s production.