No right to sell coal from captive mines to 3rd party: Govt

NEW DELHI: The Coal Ministry, which has put three mines on auction, has said that companies allocated coal blocks for a specified purpose will not have the right to market, sell or export the fuel to any third party.

The development follows complaints with regard to alleged sale of coal by Jindal Steel and Power Ltd from its captive mines in Chhattisgarh.

"It is expressly further clarified that mine allocatee shall not have the right to market, sell or export coal to any third party," according to a ministry document.

"Mining lease granted in respect of the mine that the mine allocatee may mine, remove, treat, produce and refine coal found in the mining area solely for the purpose (permitted end use)...and for no other purpose," it said.

"In the event there is more than one end use plant, the coal produced in the mine shall be allocated to each end use plant...or in any other proportion as the mine allocatee deems fit provided all the end use plant(s) have been commissioned and brought into commercial operation, as per their declared capacities," it added.

The Coal Ministry had in February initiated the auction process for putting two mines in Jharkhand and one in West Bengal on the block, having an estimated 500 million tonnes of reserves, for captive use of steel, cement and sponge iron firms.

The move came after the Centre drew flak from the Comptroller and Auditor General for delaying the auction.

The government auditor had earlier alleged that allotment of 57 mines to private firms without auction resulted in a notional loss of Rs 1.8 lakh crore to the exchequer.