Kolkata: The government has decided to allocate fresh coal blocks to public sector companies for commercial mining in order to meet demand for the fuel from small industries located in coal-producing states.
While the government hasn’t decided on the total size of coal resources to be put on offer, the criteria and modalities for the allocations were likely to be finalized by June, coal secretary Anil Swarup said.
Through this mechanism, many small consumers of coal who were not eligible to participate in the recent auctions could secure fuel supply in an equitable system, Swarup said in Kolkata on Sunday at a Coal Consumers’ Association of India interactive session.
In the first phase, the scheme will only apply to coal-producing states such as West Bengal, Odisha and Chhattisgarh. The states will be encouraged to tie up with state-run firms for commercial mining of coal. The coal thus mined would primarily meet the demand of local industries.
In the next phase, the government will evaluate whether to include small industries in other states, Swarup added. “This way we want to ensure that companies that were not big enough to participate in coal auctions also have their share,” he said.
The centre recently allotted 38 mines to central and state public sector units for their own use after auctioning 33 other mines in two tranches for a total of `2 trillion.
The coal ministry is likely to auction 16-24 more coal mines by this month, Swarup said. Of the 16 already identified, 11 will be reserved for the power sector. “After the next phase of allocations, the coal demand of India’s power sector would be fully met,” Swarup said.
In the next phases of the auctions, the government will also consider segregating different non-power-producing sectors in bundles and auctioning coal blocks to each of them separately in order to eliminate unequal competition, Swarup said. For example, coal blocks will be auctioned to steel companies and cement makers separately.
“The bottom line is transparency and everybody will have to bid for blocks if they want fuel security,” Swarup said.
The ministry will come up with a policy paper on the auctioning of coal linkages by June, he said. “We want to extend the same transparency of coal block auctions to ensure equitable allocations of linkages as well,” he added.
Source: Mint; 06 April 2015