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Regulatory hurdles at the State level create trouble for the Centre in meeting its ambitious coal mine auction targets.
During the coal mine auctions, it was promised that for operational mines, all local clearances such as environmental and forest, will be automatically transferred to the bidder. But this has not been the case. State governments have pushed for initiating fresh environmental and forest clearance approvals that have delayed the monetisation of auctioned blocks.
Apex court curbs
According to officials in the know, this delay has dampened the enthusiasm for auctioned coal mines. “The coal mining sector has been worst hit by the Supreme Court orders. In addition to the order cancelling existing allocations, another order on illegal mining has spooked the sector. According to the August 2017 SC order, all mining is declared illegal even if a single regulatory approval is not accorded. This stance has slowed down the approval process, straining investor interest in the mines up for auction,” a Coal Ministry official told BusinessLine .
This is corroborated by a report of the Comptroller and Auditor General of India. In its report on coal auctions, the CAG noted, “Pendency of various approvals at the level of the Central and State governments and with the allottees themselves affected the achievement of the very objectives of early auctioning of these coal mines.”
Mine owners
According to the Ministry of Coal, there are 454 coal mines. Of these, Coal India Ltd (CIL) has 369 mines, Singareni Collieries Company Ltd (SCCL) 48 and the remaining 37 belong are captive or belong to private players.
They include the 31 coal blocks that were tendered during the first round of coal mine auction for that was announced by the Ministry of Coal in December 2014.
The auctions concluded by March 2015 and the Centre had managed to sell 29 mines. They were broadly divided into two categories: Those already producing (Schedule II mines) and the ones ready-to-produce (Schedule III mines). Of these, vesting orders had been issued for 26 coal mines (15 Schedule II and 11 Schedule III). For three mines, the vesting orders were not issued due to pending court cases.
In all, the Centre had re-allocated/auctioned 86 out of the 208 coal mines cancelled by the Supreme Court in 2014. But actual production is happening in just 23 as of December 2018.
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