Coal news and updates

State-owned companies to get allocation nod for coal mines

The small and medium scale industries in Bengal as well as the state government are likely to get some relief in the coal front. The coal ministry has decided to give in-principle allocation of some coal mines to the state government-owned companies on commercial basis in order to ensure uninterrupted coal supply to smaller iron & steel, cement and other coal-intensive industries. This was disclosed here on Thursday by coal secretary Anil Swarup at an interactive session with Bharat Chamber of Commerce.

"We are seriously considering to allot coal blocks to state companies in non end use basis," he said. A source in the coal ministry said soon the ministry would invite applications from the state-owned companies with experience in mining for coal blocks. However, for auctioning of mine for commercial purpose, centre has yet to decide on modalities. West Bengal Mineral Development and Trading Corporation (WBMDTC), the nodal state body for mining and minerals in the state, got six coal blocks in the state dispensation route during the UPA regime in 2008.

The six coal blocks that were allotted to WBMTDC are Ichhapur, Kulti, Jagannathpur A, Jagannathpur B, Sitarampur and Trans-Damodar. The combined reserve of these blocks was around 1,307 million tonne. Icchapur is the biggest block with 335 million tonne reserve. Icchapur, Kulti and Sitarampur were given for captive use mainly to JSW Bengal Steel. A small portion (20%) of Sitarampur was given to Rashmi Metaliks, a ferro alloy company. Jagannathpur A and Jagannathpur B were allotted to Jai Balaji for their steel project. Trans-Damodar was kept for commercial mining. However, following Supreme Court verdict last September, all these mines were de-allocated.

Currently, WBMDTC is working as a nodal body for selecting mining development operators (MDOs) for mines allocated to West Bengal Power Development Corporation and DPL. The blocks allotted to WBPDCL are Borjora, Borjora (north), Gangaramchak, Gangaramchak Bhadulia, Tara (east and west), Panchwara (north) and Kasta (east). DPL got Trans-Damodar through auction.

Commenting on the MDO selection, Swarup said that it has prepared draft guidelines for that and is sending this to state governments. In Bengal, WBMDTC has already started the process for selection of MDO through tender.

The coal secretary pointed out that Bengal is likely to get Rs 19,300 crore over a period of 20-30 years from coal auction, royalty and cess.

Commenting on auctioning of coal blocks for commercial use, he added that earlier it was observed that private operators made super normal profit through commercial mining of coal blocks. "They have mines coal at the cost of Rs 300 and sold it for Rs 3,000 to smaller units. So we have to ensure that it does not happen," he added.

source: http://timesofindia.indiatimes.com