Largesse for companies from backdoor sale of captive coal
New evidence shows that the government itself has been allowing private companies to sell coal mined from captive coal blocks although commercial sale of coal is not legally permissible. The Coal Mine Nationalisation Act restricts coal mining to Central PSUs or to companies which have been allocated captive coal mines for a specific end-use like production of steel, power or cement.
The captive coal block policy framed under the Act specifies that even coal rejects and middlings generated during coal washing cannot be sold by any captive coal block owner. However, the Coal Ministry has been found to be in violation of the Act by permitting private companies to sell coal rejects and middlings.
The government admitted in Parliament on May 16, 2012, that “coal rejects and middlings after washing of coal are disposed of as per provisions of Colliery Control Rules, 2004 and Coal Mines (Taking Over Management) Act 1973”.
It is necessary to understand that rejects and middling of medium or higher grade is equivalent to lower-grade coal. Coal is a combustible rock mainly made of carbon categorised in Grades A to G depending on its calorific heat value. The higher the heat value, the higher the grade. Since any coal deposit contains several grades of coal, it is washed to secure the grade that is required. The residual of this process is called rejects and middlings, which is actually coal in every sense.