HYDERABAD: Cautioning that the very existence of Singareni Collieries Company Limited (SCCL) will be at stake if no new coal blocks are acquired, Deputy Chief Minister Mallu Bhatti Vikramarka announced that the state government will participate in all auctions conducted by the Centre in the future.
He pointed out that abstaining from auctions in the past has already caused a staggering loss of Rs 60,000 crore.
Speaking to reporters at the Secretariat on Friday, alongside SCCL Chairman and Managing Director Balaram Naik, the deputy CM said the government is determined to acquire coal blocks, even at higher bidding prices. Operations in 10 out of 38 existing coal blocks, he noted, will come to an end within the next 10 years.
He revealed that a new entity, Singareni Global, will be set up to pursue mineral exploration worldwide. A consultant has been appointed to conduct a global study. He recalled that SCCL has already secured an exploration licence for gold and copper blocks in the Devadurga region of Karnataka, thereby foraying into critical mineral exploration.
Singareni, he said, will secure a 37.7% royalty share throughout the mine’s lifespan, irrespective of who operates the mine in the future.
Keeping in view the interests of thousands of workers, Bhatti said the company has now been permitted to participate in coal block auctions conducted by the Union Coal Ministry. Securing new blocks, he stressed, is essential to the company’s survival.
‘Abstaining from auctions a grave mistake’
He admitted that the decision to abstain from earlier auctions was a grave mistake. He alleged that the auction process has largely benefited private players, while the Centre and states have gained little beyond royalties and taxes. In the past, he recalled, all coal blocks in the Singareni region used to be allocated directly to SCCL.
As a result of the auction system, two major coal blocks adjacent to Singareni — Sathupalli and Koyagudem — went into private hands. This, he said, led to a massive revenue loss of Rs 60,000 crore.
“While Singareni produces 72 million tonnes of coal annually, production could fall by more than half without new blocks,” Bhatti warned.
“To safeguard the livelihood of 40,000 direct employees and 30,000 indirect contract workers, and to ensure the survival of the company, the government has decided to allow Singareni to participate in all future auctions,” he said.