Government to auction coal blocks within 6 months; CIL likely to take charge of 40 mines

NEW DELHI/KOLKATA: The government will auction coal blocks within six months to raise output and is likely to ask Coal India to take charge of the 40 operational captive coal mines.

Coal blocks, which have acquired land and obtained regulatory clearances, will be auctioned first. However, the government will have to work out ways to compensate the present captive coal block owners for the blocks and modalities to take the land back from the companies, a senior coal ministry official said. Coal minister Piyush Goyal was unavailable for comments but sources said he apprised the Cabinet of the impact of the judgement during Wednesday’s meeting.

The coal ministry official said it will be easy to auction five de-allocated coal mines that were expected to begin production this financial year. The five mines are Mandla North of Jaiprakash Associates, Sial Ghoghri of Prism Cement, Toksisud North of GVK Power, Bicharpur of Madhya Pradesh State Mining Corporation and Kharga Joydev of Damodar Valley Corporation.

The Supreme Court on Wednesday cancelled mining licences of 204 coal blocks and levied a retrospective penalty of Rs 295 per tonne on the mining companies. Former coal secretary Alok Perti said blocks can be cancelled and given to Coal India but it will be difficult for the company as it was never interested in mining these blocks. He said CIL will have to start from a scratch if private companies withdraw their machinery and labour from the mines.

A Coal India director said the company will have to make additional arrangements for blocks that are allocated to it. “We need to check what kind of transfer in ownership will be offered to us,” he said. “In case it is an ad-hoc transfer of ownership, we need to organise resources temporarily, so that these producing blocks can be handled. Even if we are handed over these operating mines on a temporary basis, we will have to organise for the statutory posts for operating them.”