Tight deadlines set for winners of coal producing blocks

Winners of producing coal blocks will have one month to apply for statutory permissions for transfer of the blocks in their names or face a deduction in the performance bank guarantee, according to a Coal Ministry timeline.

Any deviation from the mining plan of such blocks would need to be submitted within four months and approved within 10 months.

The ministry issued eight such milestones for the development of the producing blocks and 18 for the ready-to-produce blocks.

Missing the deadline for any milestone would result in part of the performance bank guarantee being deducted.

For example, if the winner of a producing block failed to apply for statutory permissions within one month, it will lose 12 per cent of the bank guarantee. If the mine was not completely transferred within three months, 8 per cent more of the bank guarantee will be deducted.

There are similar milestones in place for ready-to-produce blocks.

However, since some work still needs to be done in these mines, the deadlines are less stringent.

The winners in the recent coal block auctions had to provide a performance bank guarantee equal to the aggregate of one year’s royalty and the annual peak-rated capacity of the mine, multiplied by the winning bid amount.

Meanwhile, on the sidelines of an event on Wednesday, Power, Coal and New and Renewable Energy Minister Piyush Goyal said that a policy to allow swapping of coal between the power plants of State generating companies and Central power companies is in the works.

“This would allow the more efficient plants to ramp up their plant-load factors and save costs on transportation,” he said.