Taking extra precautions to introduce greater transparency in the sector, the Coal Ministry will approach the Cabinet with a policy on auctining the captive blocks and also before inviting bids for the same.
"The policy for auctioning captive blocks has already been drafted. We plan to seek Cabinet's approval on it in a month or two," Coal Minister Sriprakash Jaiswal said.
The Ministry will also seek Cabinet's nod prior to inviting bids for the blocks, he said adding, "Can there be more transparency than this?"
He emphasised that henceforth allocations of captive blocks would be made through auction only and since his assuming charge of the Ministry, none of the blocks was bid out.
An inter-ministerial screening committee, which includes representatives from state governments concerned, currently allocates coal blocks to private firms engaged in generation of power and production of steel among others.
State-run Coal India, which produces over 80% of coal in the country, however, has already said that it does not intend to participate in any kind of bidding and instead seeks preferential allotment to coal blocks.
The Ministry had earlier said an inter-ministerial panel was likely to draft the modalities of competitive bidding for coal blocks by January this year.
Parliament in August last year had passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2010, which paved the way for introduction of auction through the competitive bidding for allocation of coal blocks to private companies for captive use.
The Coal Ministry has allocated a total of 208 coal blocks with around 50 million tonne of reserves for captive use to various power, cement and steel projects.
