Coal news and updates

Allotment orders soon for commercial mining by 7 states

The Ministry of Coal will issue allotment orders to 7 state government entities for commercial mining of coal after September 26, a senior official told ICMW.

“Seven states have signed the agreement and they will have to make payment by September 26. Once they make the payment, we will issue allotment orders in a day or two,” Joint Secretary in the Ministry of Coal, Vivek Bhardwaj, said.

He was talking on the sidelines of the 42^nd annual general meeting of Coal India Ltd (CIL) in Kolkata.

Incidentally, the ministry had invited applications from state entities for allotment of 16 coal blocks for commercial use.

Eight blocks were supposed to be awarded to coal-bearing states, while the remaining eight were to be allotted to non-coal bearing states.

However, the blocks are basically non-developed one and substantial time would be required for producing coal from these blocks.

Asked if the blocks that would be allotted to states would be mined through MDOs, Bhardwaj said, “We have not said anything in this respect. It is for the company which will be allotted the block to decide how to mine coal from that.”

For example, Gaurangdih ABC block has been allotted to West Bengal Mineral Development and Trading Corporation Ltd (WBMDTC) and it is the company that will decide how they want to extract coal, on their own or through MDOs, Bhardwaj explained.

On whether the government will fix the price for coal to be extracted from such commercial mines, the Joint Secretary said, “The price will be decided by them only. They may like to sell it at below CIL’s price.”

“We don’t even decide the quantity of coal that would be sold by them. Because in a depressed market CIL has to continue production as they are public companies and it cannot stop production, but a private commercial miners will stop production as they are allowed to do that,” he said.

The ministry has signed agreement with seven state government entities for allotment of the same number of blocks.

While Patal East block in Jharkhand has been allocated to Jharkhand State Mineral Development Corporation Ltd, Dahegaon/Makar Dhokra-IV block has been allotted to Maharashtra State Mining Corporation Ltd.

Baitarni West block has been allotted to Odisha Mining Corporation Ltd, Penagaddppa block in Telengana has been allotted to Singareni Collieries Company Ltd, Gourangdih ABC block to WBMDTC, Madanpur South block in Chhattisgarh and Suliyari block in Madhya Pradesh have been allotted to Andhra Pradesh Mineral Development Corporation Ltd.

Seven blocks - Shankarpur Bhatgaon II Extn in Chhattisgarh, Dongri Tal-II, Sahapur East, Sahapur West and Marki Barka in Madhya Pradesh, Anesttipalli in Telengana, Kosar Dongergaon in Maharashtra, Mednirai in Jharkhand and Punkula-Chilka in Telengana – are yet to be allotted.

As per the terms of the allotment of commercial coal mines, the state government agencies would have to mandatorily reserve 25% production for the MSME sector and entire coal produced from such mines has to be sold through e-auction for supply of coal over a period of time or through spot e-auction basis.