Govt opens up coal mining again for private sector

Rules bent for swapping of coal, mining, land & management transfer

Opening up the coal sector for investment after a legal hiatus, the government enforced an ordinance to maintain continuity in coal mining and production. While the prior owners of the cancelled coal mines have been asked to continue with the mining operations, the government would soon start the e-auction process to scout for fresh investors.

“In relation to Schedule II coal mines (operational coal mines), the successful bidder which was a prior allottee, shall continue coal mining operations after the appointed date in terms of the approved mining plan,” said the coal mines (special provisions) ordinance, 2014.

Bending the rules to optimally utilise coal, the successful bidder of the block would be allowed to use the mine for common specified end-use in its plant located at different location as well. A successful bidder can also enter into an arrangement of coal supply with other successful bidders or coal linkage holders, said the ordinance. The mine owners however are not allowed to sell the coal commercially.

The government on Monday moved in cabinet the ordinance to allow private companies to bid for the 204 coal blocks cancelled by the Supreme Court in its ruling on September 24.

The government would appoint a designated authority to take control and possession of land used for coal mining operations, with discretionary power to “direct the prior allottees provide the requisite manpower, as may be necessary, to ensure continuity in coal mining operations and production of coal”.

Government has earlier sought details of land ownership and human resource from the coal block owners to facilitate the mine transfer plan.

The current owners of the 42 operational coal blocks would have to pay the fine of Rs 295 per tonne imposed by the Supreme Court. These defaulters are also allowed to participate in the fresh bidding process, lest the prior allottee is convicted for an offence relating to coal block allocation.