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CIL may take over producing coal blocks if SC cancels allocation

CIL trade unions have demanded that the blocks declared illegal by the courts should be vested with the miner...

Coal India Ltd (CIL) may be asked to take over some producing coal blocks to ensure business continuity in case the Supreme Court cancels them in its 1 September hearing, after a verdict this week that said most of the 289 blocks were illegally allocated to companies, two foreign brokerages and a news portal said.

“The need to pull out all stops to augment production by Coal India would become even more imperative…asking Coal India to develop some of the deallocated coal blocks may also be considered,” said a report from Nomura. “We believe that in the case of operational coal blocks, possible options could be penalties to regularize the coal blocks or hand over to Coal India,” said a Macquarie report. Web portal Mining Weekly said the Communist Party of India-backed trade unions of Coal India have demanded that the blocks declared illegal by the courts should be vested with Coal India.

“The government should ensure return of all coal blocks to Coal India for further development, mining and production while also taking steps to bring those responsible for the coal scam to book,” Centre for Indian Trade Unions general secretary Tapan Sen was cited as having said by Mining Weekly. The Supreme Court declared all coal blocks allocated between 1994 and 2010 as illegal on Monday on a petition by lawyer-politician Prashant Bhushan, exempting only those blocks belonging to the ultra-mega power projects. The apex court said it will decide if the blocks would be deallocated or penalized on 1 September after hearing more arguments.

Coal India’s chairman and additional secretary in the coal ministry A.K. Dubey did not return phone calls seeking his comment on the matter since Wednesday. A director on the board of Coal India, who could not be named due to company policy, said such a plan would be extremely hard to implement and a former government official added that Coal India may not have the wherewithal to run additional mines. “This would have a lot of complications. While Supreme Court can cancel the letter of allocations, can it really cancel the mining lease that was issued under the mining Act?” the Coal India director said. According to the Nomura report, 218 blocks are facing de-allocation, out of which over a 100 belong to the private sector. Of the total blocks, 42 are producing blocks slated to produce 53 million tonnes of coal in the current fiscal 2014-15, Nomura said.

Source: www.livemint.com