Following the government’s latest directive, public sector power producer NTPC Ltd plans to surrender three non-operational coal mines- Mandakini-B in Odisha, Banai and Bhalumuda in Chhattisgarh- to the Coal Ministry.

According to an NTPC spokesperson, the company was allocated ten coal mines, including one mine, under a joint venture with the Jharkhand government. Of these, three are operational and another two are in advanced stages and likely to be operational soon. “NTPC is surrendering three non-operational coal mines namely Mandakini-B, Banai & Bhalumuda to the Ministry of Coal. Three non-operational coal mines are being surrendered for various reasons not attributable to NTPC, like geo-mining constraints, non-availability of overburden dumping land, local resistance, demand for exorbitantly high land and R&R rates, etc,” the spokesperson told BusinessLine.

The surrendering of the mines would help NTPC avoid developmental risks, cost of delays and the high cost of coal, among others. “NTPC’s focus currently is more on renewable and for a majority of its coal supplies it has FSA with Coal India. So it makes sense for them to surrender some of the non-operational mines,” Rupesh Sankhe, analyst at Elara Capital India, said. 

Two of Coal India’s subsidiaries – Western Coalfields (WCL) and Bharat Coking Coal (BCCL)- had around five-to-six such coal mines, which have been surrendered even before the directive came, according to sources. Eastern Coalfields (ECL), another subsidiary of CIL, has one coal mine in West Bengal, which has been non-operational due to reasons beyond the company’s control. This mine is likely to be surrendered.  

The government directive

The Cabinet Committee on Economic Affairs (CCEA) had recently approved the Coal Ministry’s proposal to give Central and State public sector undertakings (PSU) a one-time window to surrender non-operational coal mines without penalty. The government’s move aims to release several coal mines, which the present allottees are either not in a position to develop or are disinterested. These mines could be auctioned as per the current auction policy. Three months’ time will be granted to the allottee government companies to surrender the coal mines from the date of publication of the approved surrender policy, the government said.

It is to be noted that post the Supreme Court order on cancellation of coal blocks in 2014, many of those blocks had been allotted to PSUs. However, as of December 2021, 45 out of the 73 mines allotted to PSUs remained non-operational. “Delays were due to reasons beyond the control of allottees, for example, law and order issues; enhancement in the area of forest from what was declared earlier; resistance of land-holders against land acquisition; geological surprises in terms of availability of coal resources,” the government said. The CCEA’s decision would lead to the coal blocks being offered under the recently launched commercial coal mines auction policy, it said.

Table Source: NTPC

MinesLocationStatus
Pakri-Barwadih Coal MinesJharkhandOperational
Chatti-Bariatu Coal MinesJharkhandTo be operational soon
Kerandari Coal MinesJharkhandTo be operational soon
Dulanga Coal MinesOdishaOperational
Talaipalli Coal MinesChhattisgarhOperational
Bhalumuda Coal MinesChhattisgarhNon-operational
Banai Coal MinesChhattisgarhNon-operational
Mandakini-B Coal MinesOdishaNon-operational
Banhardih Coal MinesJharkhandAllotted in 2018 – land acquisition and other clearances in progress
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