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Only 7 of the 28 coal mines auctioned are operational

RICHA MISHRA DEBABRATA DAS New Delhi | Updated on January 23, 2018

COAL-9_2467044g

As 3rd round begins, State-level approvals, land transfer remain issues

As a fresh set of coal mines go under the hammer from Tuesday, a look at the 28 blocks auctioned in the previous two rounds shows that mining activity has started only in seven. Coal Ministry officials blame “State level issues” for this situation.

“Most of the issues are at the State level. Though the auction is being undertaken by the Nominated Authority of the Central Government, the consent to operate and other necessary approval have to come from the States,” a senior Coal Ministry official told BusinessLine.  Asked if land acquisition is an issue, the official said, “Not exactly land acquisition, but there are cases of transfer of land. Some issues have cropped up which probably no one had thought about. For example, when a sale deed is executed, it has to be between the seller and the buyer. There could be instances of the original land owner not willing to transfer the land.”

“But, this has nothing to do with the Centre. We don’t have any role to play here,” the official added. 

Previous rounds

In the previous two rounds of auctions, nine mines with extractable reserves of 800 million tonne were sold to the power sector.

The 19 mines sold to the unregulated sector of steel, cement and captive power had extractable reserves of 457.495 million tonne. 

The auction of the mines in the first two rounds fetched over ₹2 lakh crore, inclusive of e-auction proceeds, royalty proceeds and upfront payment. Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, had said that the coal bearing States of Odisha, Jharkhand, Chhattisgarh and others will get ₹1.83 lakh crore as e-auction proceeds, ₹25,029 crore as royalty over the mine life of approximately 30 years and ₹1,100 crore as upfront payment from the auction winners.

In the latest round (third round of auctions), five blocks are on offer with 162.65 million tonne of extractable reserves, with no preferences for the power sector. Originally, 10 were supposed to go under the hammer but four mines were withdrawn due to lack of bids and Jamkhani, due to ongoing litigation has been withdrawn. 

Jamkhani, an unsold mine from the previous two round of auctions, had the highest amount of extractable reserves at 114.98 million tonne amongst the original 10 mines that were on offer for the third tranche. The technically qualified bidders for the mine included Bhushan Power & Steel Ltd, Hindalco Ltd, Jindal Steel and Power Ltd and Vedanta Ltd. 

When asked about the decision to not to extend any special preference to power sector in the latest edition of auctions, the official said, the sector’s requirement had been sufficiently met in the first two rounds. 

Published on August 11, 2015

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