A year after e-auction, coal mining stays in slow lane

Legal cases, delayed clearance haunt states and private miners

A year after the historic e-auction of mines, coal mining is back to where the trouble began - legal and regulatory tussle. Of the 34 operational mines that were auctioned to private firms and allotted to state government utilities - while 22 have got mining leases - only 10 are producing.

Mining has started in four states - Odisha, Madhya Pradesh, Rajasthan and Chhattisgarh. Not a single mine in Jharkhand has started production even though it has 15 mines, of which four were about to produce coal from mines. Among the private companies, Essar Power, Jaiprakash Associates and CESC have started production for power generation and Sunflag Iron & Steel in the unregulated sector.

Twelve coal mines in Punjab, Karnataka and West Bengal are facing legal heat from a mining contractor, EMTA, which has contested the appointment of mining development operator (MDO) in these states. Coal ministry officials say the total coal production has touched 20 million tonnes from 10 producing mines. The total proceeds from the mining transferred to the mine-bearing states stand at Rs 1,350 crore.

"The central government's task was over after the handing over of the mines. Thereafter, everything now falls in the purview of the state government - from land clearance to mining lease. Both auctioned and allotted mines are facing hurdles as the forest and land clearance of Jharkhand government is under a cloud," said an official in the coal ministry. In the last review meeting held in February, the state government officials informed the coal ministry that land details were not properly recorded at village level. State government officials in Jharkhand say the state applies due diligence before giving the final nod to mining. According to sources, it was after the mines were allocated to successful bidders that the state decided to revisit the land clearances.

"The state government claims mining land in most of the mines falls under forest land. This was not the case when Centre surveyed the area before auction. The state has not offered any mining lease to any coal block owner," said an official.

After a Supreme Court ruling in August 2014 cancelling all coal blocks allocation of the past two decades, the coal ministry started reallocation through transparent e-auctions. It allocated 34 operational coal mines to private companies through auction and to states through allotment - for both power and non-power sectors. The revenue estimated to be collected is Rs 2.85 crore over 30 years for mine-bearing states. EMTA, which is one of accused in the coal scam, has dragged three states to court. EMTA has contested the appointment of MDO in West Bengal, Punjab and Karnataka on grounds of 'right of first refusal', or ROFR, and questioned the MDO-appointment process.

In July 2015, both Karnataka and Punjab appointed EMTA as their MDOs to execute the mining of coal for power production rather than selecting through a tender process. After the coal ministry sought explanation for bypassing the tender route, the states started fresh tendering process.

EMTA filed cases in respective high courts of Karnataka and Punjab asking for ROFR. EMTA, formerly known as Eastern Mineral & Trading Company, held the second-largest tranche of coal blocks as its MDO when it was allocated earlier through a screening committee route.

It is one of the key accused in the coal scam for allegedly ignoring the clauses for forming joint ventures and getting pecuniary gains through the arrangement. MDOs were supposed to be hired on contract.

MINING THE TRUTH

• Of the 34 operational mines, 10 mines producing 20 million tonnes of coal
   
• Mines in Jharkhand face land and forest clearance issues, land disputes and erroneous data
   
• 15 mines reallocated from Jharkhand, four of which were operational but mining hasn't begun
   
• Rajasthan, Chhattisgarh, Odisha and MP start mining in their captive mines
   
• West Bengal, Punjab and Karnataka face legal hurdles from EMTA
   
• Only four private companies start mining. Plagued by internal problems, Essar Power unable to exceed mining deed