To open coal mining sector, govt set to auction 10 mines

Breaking the 41-year-old stranglehold of state-owned Coal India Ltd (CIL), the government has decided to offer 10 mines for auction as a first step in opening up India’s commercial mining market for coal. This comes seven months after the Centre had announced that the coal mining sector would be opened for commercial mining in 2017-18.

Four coal mines from Odisha are likely to be auctioned in the first phase — Chendipada, Chendipada-II, Mahanadi and Machhakata; four coal mines from Chhattisgarh — Shankarpur Bhatgaon II Extension, Durgapur II/Taraimar, Durgapur II/Sariya, Madanpur (North) — and one each from Madhya Pradesh (Dongri Tal-II) and Jharkhand (Mednirai). “The Centre is yet to decide the timeline to auction these ten coal mines,” sources said.

While coal mines such as Chendipada and Machhakata have fairly high estimated extractable reserves of 1244.37 million tonnes (MT) and 474.34 MT respectively, mines such as Shankarpur Bhatgaon II Extension and Mednirai have estimated extractable reserves of 80.14 MT and 80.832 MT respectively.

In the beginning of 2015, the Coal Ministry had begun preparing for the auction of a few of the 214 coal mines that were de-allocated following the Supreme Court order of September 24, 2014. The top court stated that the companies would have to return the coal blocks by March, 2015. Subsequently, the Coal Mines (Special Provision) Act was passed in 2015 that allowed the government to auction mines to private entities for mining and commercial sale.

The three phases of the coal auction for nearly 45 coal-producing blocks were conducted in the seven-month period of February-August, 2015, but all of these were auctioned for captive usage by the company only and sale of coal on commercial basis was disallowed.

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