June 3, 2011. Coal India's annual output would fall by 11.5 million tonnes this fiscal because of a recent order from the environment ministry that requires a company to obtain forest clearances before mining even in barren areas if another part of the coal block has a forest. The coal ministry has urged the environment ministry to withdraw the order. Coal minister Sriprakash Jaiswal said the directive has begun to impact existing and future projects. Finance minister Pranab Mukherjee heads a group of ministers that is currently looking into environment-related issues of coal projects. The group has not been able to make any headway during last two meetings. Prime minister Manmohan Singh will hold a meeting with coal, power and environment ministers on June 7 to discuss the issues. Jaiswal said the time consuming procedure will adversely affect coal production and jeopardise attached projects as obtaining stage-I forest clearances takes 3-5 years. This would compel end use consumers to import on a large scale for which there is no adequate capital and infrastructure. Import costs have also risen significantly in the past year. As per the revised procedure, companies have to obtain forest clearances prior to seeking environment clearances if any forestland diversion is required in future. Earlier, environment clearance was an independent process. Even mining projects that have already secured environment clearances would now have to obtain forest clearances within a years' time. Jaiswal said Coal India would not be able to mine 39 million tonnes coal in the current financial year due to environmental objections in mines falling in industrial clusters. The environment ministry has barred development in some industrial clusters because the pollution index has risen above the permitted level of 70. Coal India suffered a production loss of 19 million tonnes last year due to this moratorium. Environment ministry has barred 203 coal blocks with 660 million tonnes reserves and 1,30,000-mw electricity generation potential as they are in 'no-go' or dense forests zone.