The coal ministry will soon cancel licences of those who were allotted coal blocks but haven’t taken steps to begin production.

Speaking to newspersons after accepting the Michael John Gold Medal jointly from Tata Steel managing director HM Nerurkar and Tata Workers’ Union (TWU) president Raghunath Pandey, Union coal minister Sriprakash Jaiswal said, “We are identifying those who have not taken action towards operating the coal blocks allotted to them and the job is nearly complete; action by way of cancelling the coal blocks allotted to those who have not been able to provide genuine reasons behind the delay would soon follow”.

Jaiswal clarified that the ministry would examine whether there have been genuine reasons like not having been able to obtain the ministry of environment’s clearance, problem of Naxalism in the area, etc, before cancelling the licences.
Altogether 208 coal blocks in the country, both allotted to private and public sector units over a period ranging from four to 10 years, are under the ministry’s scanner as the allottees have not taken sufficient steps to operate them.
Asked whether, as suggested by Orissa chief minister Naveen Patnaik recently, the coal ministry was thinking of determining royalty on coal on the basis of its market price, the minister said the suggestion of the Orissa chief minister has been received and that a decision on it would be taken “in due course”.

Royalty on coal was being fixed ad valorem on a notified Coal India price and not on a particular grade’s market price.

Patnaik has suggested that royalty be fixed at 20% of the market price of a particular grade of coal. Though revision in rates of royalty on coal should take place once every three years, it is already overdue now, having been revised last in 2007.
The delay is said to be causing enormous loss to coal producing states such as Jharkhand, Orissa and West Bengal.

When asked how the ministry was thinking of bridging the gap between the projected demand for coal in 2011-12 at 713 million tonne and the projected production of only 630 million tonne, the minister said while CIL had its own limitations (in hiking production) the “pressure” on coal demand in the country had risen “significantly” particularly after the Japan disaster at Fukushima nuclear plant.

The minister admitted that import of coal, which has been kept under OGL, would show a substantial rise in the coming years given the fact also that 80% Indian coal being mined was of “average” grade and only 20% of “superior” quality. Jaiswal said while exploration work was on at 52 new locations across the country (identified by CMPDI), his ministry, keeping in mind stricter norms of the ministry of environment was now encouraging new technology in coal extraction such as UCG (underground coal gasification) and CTL (coal to liquid).

The minister said while two CMPDI-identified coal blocks, fit for adoption of UCG technology, had already been allocated one each to Tata Steel and Jindal Steel & Power, the ministry was now planning to give one such block to Coal India.