 "Govt kick-starts commercial coal mining with states")
Taking the first step towards commercial mining and sale of coal in India, the ministry of coal has decided to allot mines to states that would sell the mined resource to interested industries.
The Centre has identified 16 coal mines with an estimated annual capacity of 40 million tonnes. The mines have been divided for host states and non-host states. This would entail non-mine rich states owning a mine in another state and using it for commercial purposes.
This is the first step to open coal mining beyond the monopoly of state-owned Coal India, the sole miner in India for 41 years. The government plans to evolve the mechanism of commercial mining by involving the states and then private miners, said Anil Swarup, secretary in the ministry of coal. This move is likely to benefit mineral-rich states earn surplus revenue. These states were till now getting only royalty from private companies mining coal for captive use.
The earlier coal blocks allotted to the states during last year under the new auction mechanism had stipulated end-use and said no sale of coal would be allowed.
Till 2013, most of the coal blocks allotted to the states changed the equity structure in favour of the mining development operator (MDO), making a private mining company the owner of a block. The Supreme Court last year struck down the arrangement and cancelled all allocations to the states.
Under the new mechanism, the states would apply for coal mines by citing their demands, reasons for demand and expected sale plan. Joint ventures by the states are allowed to apply as long as the state department or utility has the majority stake in it (74 per cent).
The state utilities would not be allowed to transfer the mine to any private company. However, the states can employ an MDO to handle the mining operations. The appointment of MDO would have to follow the MDO guidelines stipulated in the new Coal Mines (Special Provisions) Act, 2014.
“Commercial mining will have strict guidelines. The states would be allowed to engage MDOs through a transparent process but only as a contractor. The Centre would make sure that no joint ventures with MDO or change of ownership happens,” Swarup told reporters here.
In December last year, the CCEA gave its approval for allotting coal mines to central and state PSUs for sale of coal, especially to medium, small and cottage industries.
Business Standard had reported earlier that coal ministry has identified 16 mines to kick-start the commercial mining plan of the government during the current financial year. The government plans to conclude the application process by July for host states and in August for non-host states.
Swarup said there was no mandate to sell coal to only MSMEs. “The states would decide the beneficiary and the price of coal. We are expecting that the states would follow a transparent system of auctioning the mined coal,” said Swarup.
The Centre has identified 16 coal mines with an estimated annual capacity of 40 million tonnes. The mines have been divided for host states and non-host states. This would entail non-mine rich states owning a mine in another state and using it for commercial purposes.
This is the first step to open coal mining beyond the monopoly of state-owned Coal India, the sole miner in India for 41 years. The government plans to evolve the mechanism of commercial mining by involving the states and then private miners, said Anil Swarup, secretary in the ministry of coal. This move is likely to benefit mineral-rich states earn surplus revenue. These states were till now getting only royalty from private companies mining coal for captive use.
The earlier coal blocks allotted to the states during last year under the new auction mechanism had stipulated end-use and said no sale of coal would be allowed.
Till 2013, most of the coal blocks allotted to the states changed the equity structure in favour of the mining development operator (MDO), making a private mining company the owner of a block. The Supreme Court last year struck down the arrangement and cancelled all allocations to the states.
Under the new mechanism, the states would apply for coal mines by citing their demands, reasons for demand and expected sale plan. Joint ventures by the states are allowed to apply as long as the state department or utility has the majority stake in it (74 per cent).
The state utilities would not be allowed to transfer the mine to any private company. However, the states can employ an MDO to handle the mining operations. The appointment of MDO would have to follow the MDO guidelines stipulated in the new Coal Mines (Special Provisions) Act, 2014.
“Commercial mining will have strict guidelines. The states would be allowed to engage MDOs through a transparent process but only as a contractor. The Centre would make sure that no joint ventures with MDO or change of ownership happens,” Swarup told reporters here.
In December last year, the CCEA gave its approval for allotting coal mines to central and state PSUs for sale of coal, especially to medium, small and cottage industries.
Business Standard had reported earlier that coal ministry has identified 16 mines to kick-start the commercial mining plan of the government during the current financial year. The government plans to conclude the application process by July for host states and in August for non-host states.
Swarup said there was no mandate to sell coal to only MSMEs. “The states would decide the beneficiary and the price of coal. We are expecting that the states would follow a transparent system of auctioning the mined coal,” said Swarup.