Coal minister Sriprakash Jaiswal today said the prices of the raw material will not surge on account of the proposed auctioning of the mining blocks meant for captive use as no commercial sale from such end-use reserves will be permitted.
"There will be no impact on coal prices since the proposal aims at auctioning of coal blocks for captive purpose only and no commercial sale of coal is permitted from the coal blocks allocated for captive use," Jaiswal informed the Lok Sabha in a written reply.
The government is working towards initiating competitive bidding for allotting coal blocks for captive use in the current fiscal.
The coal ministry had last year introduced a bill to amend the Mines and Minerals (Development and Regulation) Act of 1957 to pave way for competitive bidding for such blocks, Jaiswal said, adding the Bill was then sent to a standing committee on coal and is expected to be reintroduced in the current session.
The MMDR Act governs allocation of such reserves.
Last week, the minister had expressed the hope that the policy for competitive bidding of captive coal blocks may come in the next two to four months. The competitive bidding for captive blocks will expedite the process of allocation of captive coal mines and would weeding out non-serious players, he had said.
However, the auctioning of coal blocks for captive use would not be applicable to the government-owned firms and to companies which has been awarded power projects on the basis of competitive bids for tariff (including ultra mega power projects), Jaiswal said.
The government has allocated 197 coal blocks for captive use to companies from power, steel and cement sectors, which consume the dry fuel to produce the end-product. The estimated reserve of such blocks totals to about 47 billion tonne.