‘Plan to Open Up Coal Min­ing for Pvt Sec­tor De­layed Due to Slump’

The Economic Times - - Economy - Our Bureau

New Delhi: The global eco­nomic slump has de­layed the gov­ern­ment’s plan of open­ing the coal sec­tor to pri­vate com­mer­cial min­ing, coal sec­re­tary Anil Swarup has said.

The gov­ern­ment is not sure whether coal blocks auc­tion for com­mer­cial min­ing will gen­er­ate ad­e­quate in­ter­est among min­ing firms, he told ET. The gov­ern­ment had ear­lier planned to open non-cap­tive com­mer­cial coal min­ing to pri­vate firms by March.

The coal min­istry had held two rounds of dis­cus­sions with pri­vate com­pa­nies in the just con­cluded fis­cal year. The min­istry has pre­pared the draft method­ol­ogy for al­low­ing pri­vate com­pa­nies to mine and sell coal and will seek pub­lic com­ments once the gov­ern­ment de­cides to open the coal sec­tor, Swarup said.

“The gov­ern­ment is not sure whether coal blocks auc­tion for com­mer­cial min­ing will gen­er­ate ad­e­quate in­ter­est among min­ing firms,” the coal sec­re­tary said, adding “the idea be­hind bids is not to ex­tract a higher value for coal but to have trans­parency”.

The gov­ern­ment was forced to an­nul the fourth round of cap­tive coal auc­tions due to poor re­sponse from steel and ce­ment firms. Of the nine mines of­fered in the fourth round, seven re­ceived less than the re­quired three bids, while two re­ceived just three bids. In to­tal, the nine mines re­ceived just 15 bids. The lame re­sponse was at­trib­uted to in­creased do­mes­tic coal pro­duc­tion, slump in in­ter­na­tional coal prices and fi­nan­cial stress in the steel and alu­minium sec­tors. Min­istry plans to re­sume the fourth round of bid­ding when the mar­kets im­prove. The gov­ern­ment has al­ready iden­ti­fied big par­tially-ex­plored coal blocks with much larger re­serves than the mines bid out to cap­tive min­ers for com­mer­cial min­ing. Clubbed mines like Chendi­pada I & II blocks and Ma­hanadi and Mach­hakata are some of the mines that are ex­pected to be ear­marked for com­mer­cial use. The gov­ern­ment on De­cem­ber 16 last year al­lowed state util­i­ties to re­sume com­mer­cial coal min­ing. The state cor­po­ra­tions were barred from min­ing and sell­ing coal af­ter the Supreme Court ruled in Oc­to­ber 2014 that it was il­le­gal.

Govt was forced to an­nul the fourth round of cap­tive coal auc­tions due to poor re­sponse from steel & ce­ment firms

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