State-run mining cos to be allocated small coal blocks,pvt firms to bid

Contrary to its earlier view,the ministry has ruled out allocating such patches of small blocks (having 8-10 million tonnes of reserves) to cooperatives run by local villagers arguing that they would not have the wherewithal to mine them in a befitting manner. “After perusing the Coal Mines Nationalisation Act,1973,we found that there was no definition of isolated coal blocks in it,” Jaiswal said and pointed out that all isolated blocks together could fetch nearly 50-60 MT coal annually.

By virtue of having minimal reserves,the blocks are economically unviable for mega project operators and also unsuitable for scientific mining. Hence they can’t be developed in a coordinated and integrated manner like their big counterparts and would not need to be ferried through railways,Jaiswal reasoned.

Moreover,due to their scattered locations,such blocks could not service the needs of the big-ticket projects. In the new policy the coal ministry has decided against such blocks being at the mercy of the state governments because it would have made them think that the coal reserves occurring in their territorial domain belonged to them and not to the nation as a whole. The ministry,through a policy in 1979,had been allocating blocks to the state corporations,which was subsequently amended in 2001. But since there was still no clarity on allocating it to private bodies,the present exercise was necessitated.

After deliberations with the Central Mine Planning and Design Institute,the ministry concluded that the government firm which has been allocated a small block could sub-lease it to any firm without forfeiting its rights over it

These organisations would be eligible to mine the coal for commercial use. “We have also inferred that a group of such identified small and isolated blocks sufficient to meet the requirement of coal to sustain a captive plant of sizeable capacity be allocated to private entities through competitive bidding as per the new amendment to the Mines and Minerals (Development & Regulation) Act under the existing guidelines under the captive dispensation route,” the minister added.