CoalMin adopts new screening process to allocate reserves

Under new method, ministry is ranking companies on different parameters

Amid allegations of irregularity in coal block allocations, the coal ministry is being extremely cautious in the case of new allocations. Under a new method, the ministry is ranking companies on half a dozen parameters, before selecting the most suitable applicant.

An amendment in the Mining Act passed in 2011 had paved the way for auctioning coal blocks. In February 2012, the ministry had notified the Auction by Competitive Bidding of Coal Mines Rules 2012, detailing the guidelines for competitive bidding. From the bidding process, it exempted government companies and power projects bid for on the basis of tariffs.

Under the rules, the ministry has allocated 17 blocks, with reserves exceeding 8.5 billion tonnes to public sector undertakings since July. The process adopted for allocating three of these blocks—Brahmani (58.9 million tonnes, or mt, of reserves) in Odisha, the Gowa block (51.4 mt) in Jharkhand and the Kerwa coal block (112.8 mt) in Chhattisgarh—earlier this week to government-owned mining companies shows the government’s desire for detailed scrutiny. The ministry received 41 applications from 17 companies for the three blocks, meant to meet coal demand from non-power industries.

Madhya Pradesh Chief Minister Shivraj Singh Chauhan had written to Coal Minister Sri Prakash Jaiswal, requesting all the three blocks be allocated to the mining corporation of Madhya Pradesh. Odisha and Jharkhand had also urged the blocks be allocated to their respective mining corporations.

It has been recommended one of the blocks be allocated jointly to Madhya Pradesh and Chhattisgarh, one to Odisha and another to Jharkhand and Bihar.

For the Brahmani block, the ministry’s technical committee gave the topmost rank to four companies — Manganese Ore India Ltd (MOIL), Rashtriya Ispat Nigam Ltd (RINL), Kudremukh Iron Ore Corp Ltd (KIOCL) and Odisha Mineral Development Corp (OMDC). The block was allocated to OMDC, as the other three companies weren’t state-mining companies; also, these weren’t in the business of coal mining or distribution.

For the Gowa block, RINL, OMDC and KIOCL were ranked first, Jharkhand State Mineral Development Corp (JSMDC) second and Andhra Pradesh Mineral Development Corp (APMDC) and National Mineral Development Corp (NMDC) third. These were followed by the mining corporations of Madhya Pradesh, Gujarat, West Bengal and Maharashtra. Bihar Mineral Development Corp (BMDC) was ranked eighth.

The block was allocated to Jharkhand and Bihar, as RINL and KIOCL weren’t into coal mining; also, these weren’t state public sector undertakings. Andhra Pradesh’s application was rejected, as the state was located far from the block, while NMDC’s application was rejected as it was a central public sector undertaking and didn’t have coal mining operations. Applications by Madhya Pradesh, Gujarat, West Bengal and Maharashtra were trashed on grounds of their distance from the block. Two factors worked in favor of Bihar and Jharkhand—rapid economic growth and the absence of “workable” coal reserves.

For the Kerwa block, OMDC, MOIL, RINL and KIOCL were ranked first, while JSMDC was ranked second. The applications of OMDC and JSMDC were rejected, as these companies had already received blocks, while MOIL, RINL and KIOCL were rejected as these weren’t state public sector undertakings and didn’t have coal mining operations. Chhattisgarh (rank-3) and Madhya Pradesh (rank-5) were allocated the block. Uttar Pradesh Rajya Vidyut Nigam Ltd (UPRVNL), NMDC and APMDC were ranked fourth, but were rejected as UPRVNL was a power company, while NMDC wasn’t into coal mining and not a state public sector unit. Andhra Pradesh was located far from the block.

TIGHTER ALLOTMENT
Coal ministry is ranking companies on several parameters before a selection to avoid controversies

Brahmani block

• Top ranks given to Manganese Ore (Moil), Rashtriya Ispat (RINL), Kudremukh Iron Ore (KIOCL) and Odisha Mineral Development (OMDC)
• Block allocated to OMDC as others weren’t state miners and weren’t in coal mining or distribution

Gowa block

• RINL, OMDC and KIOCL ranked first
• Block allocated to Jharkhand and Bihar mineral development agencies
• RINL and KIOCL rejected as these weren’t in coal mining and weren’t state public sector undertakings
• NMDC’s application rejected as it was a central public sector undertaking and didn’t have coal mining operations
• Applications of state agencies from Madhya Pradesh, Gujarat, West Bengal and Maharashtra cancelled as distance between plants and the block was too much

Kerwa block  

• OMDC, MOIL, RINL and KIOCL ranked first
• Applications of MOIL, RINL and KIOCL rejected as these weren’t state undertakings and didn’t have coal mining operations
• Uttar Pradesh agency application rejected as it was a power company