Ministry Plans auction of 25 Coal Blocks in Gujarat, Jharkhand, Maharashtra

The coal ministry plans to auction about 25 coal blocks that were taken back from private firms over delays in developing them. These blocks have not attracted lawsuits so far. The recalled blocks mainly consist of small mines but do include some big ones like Mahal and Rajbar in Jharkhand, a senior government official said.

“We are looking at auctioning coal blocks that have been de-allocated and taken back from various companies in the last two years. The de-allocation of these mines has not been challenged in any court so far and they can be bid on soon,” the official said. He said earlier the de-allocated coal blocks were given for development to state-run miner Coal India Ltd but the Mines and Minerals (Regulation and Development) Act, which was recently amended, provides that coal blocks can be allocated through auction.

Besides Jharkhand, the blocks proposed to be auctioned are spread across Chhattisgarh, Gujarat, Maharashtra and Andhra Pradesh. The official said these blocks can be auctioned to steel and cement companies or allocated to power firms under tariff-based bidding. Some of the mines were surrendered by the allocatee companies citing difficult mining conditions. Among the blocks proposed to be auctioned are 1,098 million tonne (mt) capacity Mahal and 215 mt Tenughat-Jhirki, both of which are in Jharkhand and were allocated to state-run Rashtriya Ispat Nigam Ltd. Other big mines proposed to be bid to companies are Rajbar in Jharkhand with 385 mt reserves, Pengedappa in Andhra Pradesh and Jainagar in Gujarat with 100 mt reserves each, and Agarzari in Maharashtra with 137 mt reserves.

The small blocks that are likely to be put on the block are Lohara East with 12 mt capacity and Bhadhak West with 38 mt capacity in Maharashtra and Ansettipalli with 26 mt reserves and Punukula Chilaka with 38 mt capacity in Andhra Pradesh. Another small block, Panchbahani in Maharashtra with 11 mt of reserves, is also proposed to be offered to companies.

The auction of these mines, however, will be subject to a Supreme Court order, which is assessing whether the Union government is empowered to re-allot captive coal blocks. The court has heard all concerned parties involved in allocation of mines, including seven states and association of mining companies. It has reserved its order. Of the 218 allotted captive coal blocks, the coal ministry has cancelled licences of 80 blocks. Almost all private companies have challenged coalmine de-allocations and bank guarantee forfeiture in the high courts of Jharkhand, Jabalpur, Chhattisgarh, Odisha and Delhi.

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