After announcing its decision to auction coal mines to private sector companies for commercial mining in next financial year, the central government is likely to issue the draft framework for it by March-end. “We are going to issue the draft framework by March-end. It would be up for public comments. The government will keep those comments in mind while developing the final framework,” said a senior government official.
On February 2, coal secretary Susheel Kumar had said in a post-budget press conference: “Next year (2017-18) in the coal sector, we will allocate 25 mines. Of these, two will be allotted and 23 auctioned, some for coking coal and some for sectors other than power, like cement, and four for commercial mining.”
He said the process and rules were under study. “The discussion paper (framework) on commercial mining is final. We would float it in the public domain soon,” said Kumar. The Centre has decided to open commercial mining of coal in the coming financial year after more than a year of deliberation. The blocks allotted to states last year under the new auction mechanism were for captive usage only — auction for commercial mining was not permitted.
In June last year, the coal ministry had decided to allot 16 mines to state governments for their own commercial mining during 2016-17. However, it was postponed due to surplus coal availability in the market. Now, the government expects a good response to the auction of these four coal mines for commercial mining as the market demand has picked up since then.
When initiated, this would be the first step to open mining beyond the near-monopoly of state-owned Coal India for 41 years. This move is likely to enable mineral-rich states to earn more. Till now, they were getting only the royalty amount from private companies mining coal for captive use.