Give extra coal from captive mines to CIL: Centre to states

Battling coal crunch, CIL received a shot in the arm today with the Centre asking states to follow norms for surplus coal disposal from a captive mine that include handing over the same to the PSU in case some of the joint allocatees fail to set up end-use plants.

"In case of joint allocation of a coal block to multiple allocatees, where one or more co-allocatees might not be able to develop there associated captive end-use plants...Disposal of surplus coal... Shall be as per the prevailing policy of government of India which could also include handing over of such coal to the nearest subsidiary of Coal India (CIL)," Coal Ministry said in a letter to state Chief Secretaries.

Asking states to incorporate such condition in the mining lease by state governments, the Centre said such coal could be either handed over to the nearest CIL subsidiary or "to any person designated by it" at a transfer price to be determined by the government.

"This clause may be incorporated as one of the conditions while granting ML (mining lease) by the state government in all cases," Coal Ministry said.

The move would result in increasing the stock of dry-fuel with the world's largest coal miner CIL, which  missed the output target of last fiscal by 3 per cent, producing 452.5 MT as against the target of 464 MT.

Earlier, Odisha government had raised the issue that quite a good number of coal blocks have been allocated to a group of private companies and even five-six firms were tagged to a single block but there was no uniformity in the progress of setting up end-use plants by them.

"It has been observed...While one allottee company is about to complete its end-use plant, the other co-allottees for the same coal block are either lagging far behind or are complete non-starters in setting up end-use plants," Principal Secretary, Steel and Mines, Odisha had said in a letter asking what should the states do under such circumstances.

Joint Secretary, Coal, A K Bhalla in letter to states has written, "Since similar issues may crop up in other coal bearing states also", they should incorporate a related clause in their mining leases.

The coal major, which accounts for about 80 per cent of the domestic output has fixed its production and offtake targets at 482 MT and 490 MT, respectively, for 2013-14.

Yesterday, the government announced allocation of Chhindwara mine, located within the migratory corridor between Pench and Satpuda Tiger Reserves in Madhya Pradesh to the state-run PSU. This was done after Ministry of Environment and Forests put a condition that mining could be allowed from the block only if it is alloted to CIL, which has another mine in the area, to utilise its existing infrastructure to mine coal.

The Coal Ministry had recently notified the mine with about 22 million tonnes (MT) of reserves and is spread across about 4 km as non-CIL block for allotment to private players for captive use.