The Telegraph
Thursday , November 29 , 2012
Since 1st March, 1999
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Auction limited to checked coal mines

New Delhi, Nov. 28: The government today said only those coal mines that had been explored would be put up for auction though bidding was unlikely this fiscal.

“After detailed deliberations the government has decided that only explored coal blocks would be put up for auction,” coal secretary S. K. Srivastava said at a coal summit here.

Of the 54 coal mines to be allocated through auction, only 12 have been explored so far, he said.

Explored blocks are those whose feasibility study has been done and whose mineable reserves, capital and operating cost and production rates are known. The explored blocks will generate more revenues and attract more bidders.

At present, blocks are classified into three categories: for commercial mining (steel, cement, sponge iron and others), for power and for government dispensation.

The coal ministry has identified 54 coal blocks to be auctioned for captive use in different sectors, including 16 for power and 12 for steel.

Coal minister Sriprakash Jaiswal had said auction would not be possible this year because of the lengthy process involved.

In October, research firm Crisil had submitted a draft report on fixing the floor and reserve prices of coal blocks.

Srivastava said, “We have advised Crisil to consult the Planning Commission on the pricing issue and the MoEF (ministry of environment and forests) on whether in-principle clearances are possible or not.”

The draft report of Crisil had suggested that the valuation of coal reserves up for bidding should be linked to international prices.

It had also suggested that in the case of power sector and other public sector companies, the government should provide discounts to avoid a hike in electricity tariff.

On giving back five de-allocated blocks to state-owned units, including NTPC, Srivastava said a decision would be taken after consultations with the law ministry.

“The law ministry is always consulted on issues which have legal implications. The law ministry is part of the decision-making process,” the coal secretary said.

Three of the five deallocated blocks belonged to NTPC, while the Damodar Valley Corporation and the Jharkhand government held one block each.