Central and State government companies have been given time till July this year to surrender their non-operational coal mines with the Coal Ministry.

On April 7, the government approved the policy for providing a one-time window to the Central and State PSUs to surrender non-operational mines without penalty (forfeiture of bank guarantee) and citing without any reason. As of December 2021, 45 mines out of 73 allotted to government companies remained non-operational and the due date of commencement of operations in case of 19 coal mines is already over.

Under this scheme, the PSUs, which have been allotted mines under the Coal Mines (Special Provisions) Act or the Mines and Minerals (Development and Regulation) Act, through allotment route, may surrender its non-operational coal block. It is for cases where the mine opening permission could not be obtained by the allottee.

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The ministry will return the performance bank guarantee upon surrender of the mine block. All pending show cause notices issued for delays would also be considered withdrawn.

However, in cases where the appropriation order has been issued, such an order shall not be waived off and the corresponding amount of performance security shall be forfeited. Also other payments made by the allottees such as upfront amount, compensation paid to prior allottees shall not be returned.

Revenue share

On the rationale behind the move, the Coal Ministry said the revenue share payable by State or central PSUs is fixed on a per tonne basis unlike the private sector who have to bid.

“Given the context of allocation of coal blocks at that point of time, conditions for timelines for operationalisation of coal blocks were very stringent and firm, leaving no wriggle room either to the successful allottee or the Nominated Authority. Penalisation for delay in operationalisation has resulted in disputes and court cases,” it added.

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 acquisition; geological surprises in terms of availability of coal resources.

In the approval, good quality coal blocks which were allotted earlier can be quickly recycled back after removing technical difficulties and adjusting boundaries and offered to interested parties under the recently launched commercial coal mines auction policy.

Early operationalisation of coal blocks will provide employment, boost investment, contribute to economic development of backward areas, reduce litigation and promote ease of doing business leading to reduction in import of coal in the country, Coal Ministry noted.

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