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Assocham urges govt to resolve operational issues of auctioned coal mines

Stating that production from auctioned coal blocks have not started even after six months of mines auction in the absence of clearances by both Centre and states, industry body Assocham said on Wednesday it has asked the government to urgently resolve all issues.

"With a view to ensure all round growth of coal sector in India... Assocham has urged the Ministry of Power to urgently resolve all issues vis-a-vis auctioned coal blocks including the delay in clearance by central and state governments and delay in release of mine infra compensation," the industry body said in a statement.

Even after six months of mines auction, output of coal has not started as clearances have not been accorded by the central and state governments, thereby hampering the cash flow in sectors, including steel and power, Assocham said in a communication to Coal and Power Minister Piyush Goyal, the statement said.

The industry body further said that it has also appealed for urgent release of mine infra compensation to the successful coal bidders as the delay in the same has further impacted the companies already depleted balance sheet.

Industry is facing acute fund problem as till now neither mine is operational nor the prior allocates have received mine infra compensation, Assocham secretary general DS Rawat said in the statement.

Further, in view of the tight liquidity crunch and with non-performing asset-wary banks reluctant to fund mine development, Assocham has requested the Power Ministry to hold the second and third installment of upfront payment till the mining lease is signed, the industry body said.

Highlighting that a provision of making payment after signing of mining lease is already there in the schedule III mines category, Assocham has advocated for granting a similar relief for schedule II mines, it said.

The government had auctioned 29 coal blocks in first two tranches of mines auction early this year. The government had put on block barely three out of the proposed 10 mines during the third round in August.

source: http://www.businesstoday.in