Coal Bill hanging fire, captive mining takes off

The Coal Mines (Nationalisation) Amendment Bill to allow unrestricted private entry into coal mining may be delayed further. The government is finding it difficult to push it through, given the staunch opposition from the Left parties. The Bill has been hanging fire since 2000.

Instead, the government is moving towards using the captive mining route to increase private sector participation in coal mining.

The trend becomes evident if one takes a look at the captive block allotment statistics. While the government took a decade since 1993 to allot 49 blocks, nearly the same number of blocks were given for captive use in just two years. Since May 2004, another 48 blocks have been allotted.

Of the 97 blocks with 18 billion tonne reserves, more than half lie with private sector. "Around 56 blocks with 7 billion tonne reserves have gone to the private sector while the rest have gone to central and state public sector units," a senior coal ministry official told Business Standard.

The coal ministry's stand comes at a time when it is gearing for fresh allotments. It has received 700 applications for the allotment of 20 coal blocks and 8 lignite blocks for captive mining. The screening committee will be meeting by the end of this month for shortlisting these applications.

"The government is not in a position to take the amendment further. The objective may be achieved to a certain extent by exploiting to the hilt the captive mining window," said the official.

Even the Planning Commission has asked for expediting the passage of the much-delayed Bill. The apex panel had also asked the government to allow partially captive coal mines owned by a power generation company to sell coal to any other public sector or privately owned power plant.

"This cannot be done as it will require an amendment in the Bill which we don't see happening soon," the official said.

For the next phase of allotments, 51 new coal blocks with reserves of 9 billion tonne have been identified. "Efforts are being made to meet the objective of the Bill," the official added.