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State-run entities to get coal blocks in two months

Last Updated 28 March 2015, 19:39 IST

The Coal Ministry is working on identifying coal blocks to allot to state-run entities for commercial mining in next two months, aiming to supply coal to households, small industries and brick kilns.

“The ministry plans to allot coal blocks for state entities on non-end-use basis. While allotting coal blocks for commercial mining, the government will ensure that ownership of the state corporation has to be at least 74 per cent of the entity that will mine,” a ministry official told Deccan Herald.

The ministry is in the process of identifying a few blocks that could be given to state entities in fossil fuel-rich states like Odisha, Chhattisgarh, Jharkhand and West Bengal, he said.

Though there is a provision in the Coal Mines (Special Provisions) Bill, 2015, passed by Parliament recently, for commercial mining for private entities, the official said the government would go step by step, making necessary assessments at each stage before opening up the sector for commercial mining.

The government, which recently auctioned the first tranche of mines for end-user, is likely to auction another 20-odd mines soon. As the government plans complete awarding by March 2016 of all 204 mines cancelled by the Supreme Court, the ministry is preparing to move faster on the auctioning process, said the official.

The government has already garnered over Rs 2 lakh crore by auctioning just 33 blocks, surpassing the Rs 1.86 lakh crore loss estimated earlier by government auditor CAG for allotment of mines without auction. The government is also thinking of auctioning coal linkages, and has constituted an official panel to explore the idea of maintaining transparency in supplying coal to end-users like power projects or steel plants.

The government has asked state-owned Coal India Ltd (CIL) to auction annual coal quantities to users like power plants through a transparent process.  CIL will provide quantities offered in the so-called linkages, to bulk users along with timelines of the auction, according to the minutes of a meeting held in the Coal Ministry.

On coal linkages, Power Minister Piyush Goyal recently said: “We have a committee that is exploring various options of what we should do with the linkages. We have not decided on a particular course of action. Once the committee gives its report, we will take a considered view in continuation of our efforts to bring transparency and integrity to the whole system.”

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(Published 28 March 2015, 19:39 IST)

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