Coal India ruled 'not qualified' for first set of block auctions

India's largest coal producer, state-run Coal India is not eligible for the first set of auctions for blocks although 17 of them are meant for public undertakings.“We have been given to understand that the blocks on offer under the auction are not meant for us. It is for state-owned power utilities and other entities that require coal as a raw material," CIL chairman S Narsing Rao said.

CIL has also not been informed so far about the blocks that were taken away from the private operators. It was earlier reported that the monopoly company may be given some of the blocks that were taken back by the government. "We have no information yet. Some of the companies have approached court and there is no clarity on the status of these blocks," said Rao.

However, the government has informed CIL that it will have to pay reserve prices for some 170-odd coal blocks that were allotted to it last year. This has the possibility to render some of the blocks unviable and CIL may be forced to return them to the government.

Some 14 blocks in these 17 to be auctioned, however, have substantial reserves ranging between 100 million tonnes to 600 million tonnes. For example, the Jilga-Barpali block at Mand-Raigarh Coalfield in Chhattisgarh has an estimated reserve of about 545 million tonnes, while the Gondbahera-Ujheni block at the Singrauli coalfield in Madhya Pradesh have a reserve of another 532 million tonnes.

35 power firms sign FSAs with Coal India

Meanwhile the Coal Ministry recently said that 35 power firms have so far entered into fuel supply pacts with Coal India, amid the government stating that most of the issues relating to FSAs have been resolved. The statement follows the government announcing last month that power companies are likely to ink fuel supply pacts with Coal India (CIL) in a month’s time.

“CIL (Coal India) after resolving the pending issues with power utilities have already signed 35 FSAs (Fuel Supply Agreements) out of 114,” the Coal Ministry said in a statement. The ministry also expressed hopes that the remaining 79 fuel supply pacts would be signed shortly. On December 21, 2012 after a meeting, Coal Minister Sriprakash Jaiswal and Power Minister Jyotiraditya Scindia informed that most of the issues related to the contentious FSAs have been resolved.

The development followed Prime Minister’s Office (PMO) directing power producers to enter into FSAs with CIL within a month. PMO directive on December 17 last year, came after its November deadline for FSAs was missed, amid differences over various issues including coal quality. Both ministers had said a joint decision had been taken to ensure that there would be no “distinction” on FSAs for public and private power companies.

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