Coal news and updates

Steel Ministry official: Era of direct allocation of coal blocks over

With the Supreme Court stating that all coal blocks allocated between 1993 and 2010 are illegal, the time of direct allocation of coal blocks is over, said Syedain Abbasi, Joint Secretary, Ministry of Steel, at an event here on Monday.

Abbasi said, "We now need to debate whether or not to allow merchant mining in the case of coal while allocating the blocks and, probably, should not tie up the end-use."

"There is definitely a significant amount of reform required in the sector," he added.

Meanwhile, Jindal Steel and Power Ltd’s Chairman Naveen Jindal said private participation in coal mining should be encouraged.

"Any country which has the amount of reserves we have would encourage companies to come and develop coal mines. The resource can remain with the country while companies pay royalties and income-tax on profits," said Jindal.

Jindal said his group companies have invested nearly Rs. 50,000 crore based on the coal block allocations and are operating its mines at 100 per cent capacity.

The fate of those investments and coal blocks now depended on what the Supreme Court decides with regard to de-allocation.

The Coal Ministry has said in case coal blocks are de-allocated, swift and decisive action would be taken to ensure continued production.

While auctioning the blocks remains an option, it is not yet clear what will be the mechanism of such a move by the Coal Ministry.

"Auction seems to be the best solution to allocate the mineral resource but the risk is that it will only attract people with deep pockets while new entrepreneurs will be left out. A solution needs to be found for them," said Rita Singh, Chairperson, MESCO Steel.

Source: The Hindu Businessline