Coal news and updates

The Union Cabinet on Monday recommended the promulgation of an Ordinance to acquire the land of those 214 coal blocks mines the allocations of which the Supreme Court had last month quashed. It also approved a plan for e-auctioning the cancelled blocks to end-user private players of coal from the power, steel and cement sectors. Government entities including public sector units such as NTPC and State Electricity Boards, however, will not have to go through the auction route as a pool of coal mines will be reserved for allocations to them from the cancelled blocks.

 

“The Cabinet’s decisions are with the view of cleaning up the coal mess due to allocations via the screening committee mechanism that the Supreme Court quashed,” Union Finance Minister Arun Jaitley said briefing reporters after the meeting of the Union Cabinet. Monday’s decisions will not disturb the structure of Coal India, he clarified.

 

The proceeds from the e-auction will go entirely to the state government where the coal mines are located including Jharkhand, Orrisa, West Bengal and Chattisgarh. The Centre will not receive any part of the proceeds. This will lead to financial empowerment of these states, Mr. Jaitley said.In the first round of e-auctions to be completed within the next three to four months only end-users will be eligible for bidding for captive mines and trading in coal will be barred, said Mr. Jaitley. “The expeditious disposal of the process will provide a huge impetus to the manufacturing sector and the country will save precious foreign exchange on coal imports and this will also help banks that have funds stuck up in the sector as a fallout of the Supreme Court’s verdict,” he said. Despite being coal-surplus India was annually importing coal worth $20 billion, the minister said.

 

The apex court had last month quashed allocation of 214 out of 218 coal blocks alloted to various companies since 1993 terming the method of allotting as “fatally flawed”. It had allowed the Centre to take over the operations of 42 of the cancelled blocks that were functional.

 

The land to be acquired back from owners of mines that stand de-allocated following the Supreme Court ruling will be valued by an independent authority under the Coal Nationalisation Act, Mr. Jaitley clarified. It will then be leased to the successful bidders in the e-auctions.

 

 

Source: The Hindu