Coal news and updates

Apex court’s coal verdict to hit Bengal hard

The Supreme Court's decision to cancel 214 of 218 coal block allocations sent ripples through coal belts of the state on Wednesday. Apart from hitting the mining firms hard, the judgment may adversely affect coal supply to thermal power plants in Bengal.

As per Wednesday's verdict, all private and public firms allotted coal blocks between 1993 and 2011 will have six more months to wind up their businesses. They will, however, have to pay a fine of Rs 295 for every tonne of coal mined all these years. A majority of firms operating in the state stopped transportation of coal on Wednesday itself while others are waiting for the detailed order.

Out of 214 cancelled blocks, Bengal has nine — eight ( three in Asansol, two in Bankura and three in Birbhum) are already functioning and the other (in Birbhum) is on the verge of starting production.

"We have stopped transportation. We are waiting for the state government's instructions. Over 3,500 employers are now staring at an uncertain future," said Nemai Chand Mukherjee, director of Bengal-Emta Coal Mines Ltd, which meets 30% of coal requirement of power plants in state. It supplies coal to West Bengal Power Development Corporation, Durgapur Projects Ltd and Damodar Valley Corporation in West Bengal and state-owned thermal power plants in Punjab and Karnataka.

According to Mukherjee, the existing Emta coal blocks had a reserve of over 30-35 years of non-stop supply. Annually, the group supplies 4 mt from Panchwara (north) in Jharkhand and 2 mt from Tara East and West to WBPDCL power plants in Bakreswar, Sagardighi, Kolaghat, Bandel, Santaldih and state-owned Durgapur Projects Ltd.

Integrated Coal Mines Ltd (ICML), which supplies coal to CESC, is waiting for a detailed order from the court. ICML general manager Sumit Ghosh said: "We supply 3.2 million tonne annually to three power plants of CESC from our Sarisathali captive coal block."

The Supreme Court has also cancelled the allocation of Trans Damodar, another block of West Bengal Mineral Development Corporation, and the yet-to-start Khagra-Joydev coal block in Birbhum.

According to sources, the verdict may also push up power tariff in near future as the cash-strapped state government may pass the burden to consumers to pay up the Rs 295-per-tonne fine. And the tariff may again rise if the Centre auctions the coal blocks afresh.

Till Wednesday evening, the power minister had not contacted the Emta Group, confirmed CEO Bikash Mukherjee. But sources said chief minister Mamata Banerjee now had a key role to play in getting uninterrupted coal supply for the power plants.

"She needs to talk with the coal minister and even Prime Minister to save these state-owned coal blocks. If it does not happen, there might be a serious tussle between the Centre and the state in future and state might not get a fresh mining lease," argued a top coal company official.

Source: The Times of India