Coal news and updates

Procedural formalities to halt output at 16 captive coal blocks

Production at captive coal blocks whose ownership has changed after the recent auctions will come to a halt for at least two months starting Wednesday, as the new owners are yet to complete procedural formalities for the takeover of mines.

This could result in lesser fuel availability for power and steel plants, and higher prices in spot markets.

Private companies that secured 16 such mines during auction are yet to complete negotiations with previous owners of the blocks for taking over the mine infrastructure and manpower.

A senior government official admitted that there will be stoppage of work at most mines for some time despite the government's best efforts.

"The procedural formalities would be done in some time. States are expected to play a proactive role in mines development as they have been incentivised with auction proceeds," the official said, requesting anonymity. "Labour, contracts, transfer of equipment, their valuation, and negotiations between previous and new allottees are expected to take some time. The coal ministry could not have moved faster than this."

While private firms that won producing mines got vesting orders facilitating takeover on March 23, the staterun companies are yet to receive them.

All the companies have to sign fresh mining leases with state governments and seek fresh approvals for mine operation from the Director General of Mines Safety.

There are a number of other procedural formalities, pending which, mining at such blocks cannot continue.

Transfer of some mines and associated infrastructure also depends on the outcome of cases in the Delhi High Court filed by previous owners, seeking higher compensation for the assets deployed at the blocks.

The government has, however, facilitated transfer of land, forest and environment clearances to the successful bidders.

Even the mines that have been retained by the previous owners are expected to face discontinuation in operations as the companies will have to sign fresh mining leases with state governments as the earlier documents stand void after the Supreme Court's September verdict cancelling allotment of 204 captive coal blocks.

The court allowed owners of 42 producing mines to continue operations till March 31 to help the government deal with scarcity arising due to the mass cancellation.

The coal ministry allotted 14 coal blocks to power generation utilities of various states last Tuesday. The companies have not received vesting orders for the coal blocks.

sources: http://economictimes.indiatimes.com