All clearances by March-end for coal prospecting to begin April 1: Secretary

In the first working meeting with stakeholders under the new regime for award of coal blocks, the government on Monday assured successful bidders under the first round of auctions that they will get all central and state approvals by the third week of this month so that prospecting can restart from April 1.

Coal Secretary Anil Swarup, who chaired the meeting with the bidders and officials from the respective states where the mines are located, asked for their inputs and suggestions by Tuesday evening so that formal letters can be issued by March 23.

Swarup said the government was keen that operations at the coal mines --halted by the Supreme Court that had declared the earlier allotments illegal and wanted fresh auctions -- begin from April 1 with the issuance of what are called vesting orders by March 23.

The vesting order, to be issued by March 23, transfers to the successful bidder all the rights, title and interest of the prior allottee and a mining lease that will be granted by the state government.

Among the statutory licences and clearances required to start coal mining are ministry of environment and forest approvals, consent from the local pollution control board, mines safety clearances and an escrow account for dealing with early exit from operations.

"For all the clearances required, our ministry will sit down with officials of all the concerned ministries to see how these can be included in the vesting order as much as possible," Coal Secretary Anil Swarup told representatives of state governments and companies that have won mines in the first two rounds of coal auctions.

"For this, I will require you (new allottees) to send in your suggestions by tomorrow (Tuesday) evening," he added.

Coal producing states stand to gain as much as Rs.55,000 crore from Round Two of e-auctions of 12 blocks that have been offered so far after the Supreme Court had declared the original allotments illegal and ordered fresh tendering.

In the first phase of auctions that concluded last month, 19 blocks were on offer and would raise for the state governments of Chhattisgarh, West Bengal, Jharkhand, Odisha and Maharashtra as much as Rs.109,000 crore over 30 years, as per officials.

Under the bidding process approved by the government, the shortlisted participants are required to submit an initial financial bid along with the technical details. On the actual date of the e-auction, the bidder is permitted to anonymously submit as many final price offers as desired.

The auction is on the basis of tariff-based reverse bidding where the end-use is power generation, and forward bidding for production of steel, cement and generation of power for captive use.

While the criteria for calculating the floor price for bidding is based on state miner Coal India's (CIL) price of coal of the same grade, the auction also has a ceiling price for power sector bidders to keep the lid on power tariffs.

(Biswajit Choudhury can be reached at biswajit.c@ians.in)