No allocation of coal blocks from Odisha

An exception has been made for State-owned mining firms.

Published: 21st October 2012 09:43 AM  |   Last Updated: 21st October 2012 10:32 AM   |  A+A-

The State Government has requested the Ministry of Coal not to further allocate coalfield to any party other than State-owned mining undertakings.

“Additional requirement of non-coking coal for the ongoing projects in the State is 250 MTA, for which additional coal reserve of about 10,000 million tonnes are required. Hence, no further coal blocks from Odisha should be allocated to any other party under the Auction by Competitive Bidding for Coal Mines Rules, 2012, except the State mining PSU,” the State Government said in letter to the Director, Ministry of Coal, P Soma Shekhar Reddy.

The State Government’s observations came in response to the Centre’s missive that sought the views of the States on the draft terms and conditions under Rule 4 of the Coal Mine Rules, 2012, for allocation of coal blocks.

Of the total allocated coal reserves to non-CIL companies, 86 per cent of it have been allocated for captive use for specified end users and only about 14 per cent of coal reserves to Government companies for commercial mining, the Steel and Mines department said in its letter.

As far as Odisha is concerned, the situation is still worse. Of the total allocated coal reserve of 15,212 MT to non-CIL companies in Odisha coalfields, 94.2 per cent of the allocated coal reserves are meant for captive use of the coal for specified-end users, it said. “Companies allocated coal blocks for captive use in specified end-users get double benefits of assured coal supply and at a lower price, whereas others, who are not allocated coal blocks, are put in a disadvantageous position,” the letter said.

In order to provide a level-playing field for all coal-based industries, priority should be given to allocation of coal blocks for commercial mining, the State Government said.

“Hence, it is recommended that more coal blocks be allocated to the State Government companies nominated by the host coal- bearing State for the purpose of mining to ensure fair and equitable distribution of coal,” it said. Applications of Central Government companies should also be routed through the coal-bearing State, which would assess the justification, it said.

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