Govt prepares draft policy on surplus coal from captive mines

The government has prepared a draft policy on utilisation of surplus coal from captive mines and is awaiting comments from various departments.

"Government has formulated a draft policy on usage of surplus coal, including middlings, rejects, etc, which has been circulated to various ministries/departments for obtaining their comments," Minister of State for Coal Pratik Prakash Babu Patil said in a written reply to Rajya Sabha.

The statement comes amid reports of sale of surplus coal by some private parties in open market against norms of captive coal block use.

As per the Coal Mines (Nationalisation) Act, 1973, there is no provision of sale of coal from the coal blocks allotted for captive use.

The Minister said "as per the conditions in the allocation letter issued to various allocatees of coal blocks, usable middling/rejects generated during beneficiation shall be used captively by the allocatee(s) in their end-use plants specified in allocation letter."

The modalities of disposal of surplus coal would be as per prevailing policy and could also include handing over such coal to the local Coal India subsidiary or to any person designated by it at a transfer price to be determined by the government, Patil added.

In another reply to the Upper House in a related issue, he said in case of violation of norms of the use of surplus coal, "The government takes appropriate action against the allocattee company including de-allocation of the block."

He said in case of Takli Jena Bellora (South Part) coal block allocated to private firm Central Collieries Company for captive use, the sale of coal in open market was reported to the government and it had declared the "mining lease of the said block as void".

Earlier, in the backdrop of the Coal Ministry's proposed surplus coal policy, the Power Ministry has said that any excess fuel mined by the private firms from the captive blocks should be returned to state-run Coal India.

The Coal Ministry has floated a draft Cabinet note over the matter and is inviting comments from concerned ministries.

According to Association of Power Producers (APP), a body representing as many as 20 electricity generation companies, the private companies have agreed to this proposal.

The Ministry of Power has also said the two proposed coal-based ultra mega power projects (UMPPs) - Bedabahal (Odisha)and Cheyyur (Tamil Nadu) - with an average capacity of 4,000 MW, will be linked to the government's surplus coal policy as and when it is finalised.

Recently, Tata Power, country's largest private power producer, had sought government approval for using surplus coal from the Mandakini coal mine for its Maithon thermal power project (Jharkhand) that is facing coal shortage, and also the end-use plant of the Mandakini mine is yet to come up.