By Our Correspondent
BHUBANESWAR/NEW DELHI/TALCHER: The Union Government has formed a 4-members empowered committees of Secretaries comprising Secretaries of Department of Economic Affairs, Legal Affairs, Coal and Petroleum and Natural Gas to deliberate on issues with regard to auction methodology and operationalisation of coal blocks allocated for commercial mining. The development comes soon after the government stated that it may launch the process of auction of coal blocks for commercial mining on June 11.
Around 50 coal blocks are likely to be auctioned for commercial mining. The empowered committee has also been mandated to revise ceiling of upfront amount for future tranches of auction in case there is substantial upward/ downward change in market conditions.
“It has been decided with the approval of competent authority to set up an Empowered Committee of Secretaries to deliberate and decide/recommend on the certain matters pertaining to auction methodology and associated matters, issues in operationalisation of blocks allocated for sale of coal,” the Union Coal Ministry said. The empowered committee will also review the two-stage bidding process for successive rounds of auction.
“In case mine/mines remains unallocated in the auction tranches held hereinafter, the same would be placed before ECoS for appropriate reduction in the floor percentage of revenue share and other terms and conditions,” the ministry said.
In case of single bid after successive rounds of auction for a coal mine, appropriate decision regarding allocation of mine will be taken by ECoS.It will also review and determine the incentives that may be allowed for early production and coal gasification or liquefaction for successive tranches of auction.
The empowered panel will also “determine the limit of maximum number of coal mines or reserves or any other parameter regarding production of coal or any other combination thereof that can be allocated to a company or its affiliate, associate company, holding company or subsidiary company in subsequent tranches of auction.”
It will also deliberate on the issues relating to operationalisation of the National Coal Index (NCI), including representative price, modalities for successive tranches and make changes in efficiency parameters including flexibility given in production as per requirement looking at the ground conditions for successive tranches of auction.
Odisha’s Coal sector, which was remain neglected for about 4 decades , will soon take a new look when the Union Coal Ministry go for open auction of Coal Blocks.
India is the world’s second largest producer of coal after China, having cumulative total coal resources of 319.020 billion tonnes (till 2018) and is dependent on coal for many of its core sectors. Odisha , which houses 79,295 Million ton of coal deposits, is the second most Coal bearing State in the Country while India is the 5th biggest coal bearing Nation in the World. In past, Odisha Government only auctioned 1 coal block-Jamkhani, which had won by Anil Agarwal’s Vedanta Limited. The Coal Ministry is auctioning as many 27 blocks.
Odisha has hiked it coal production by 23 % in last 5 years, while National Coal Production increased by 24 %. Out of the 27 Coal Blocks, 21 have been reserved for auction to all Non Regulated Sectors, such as Steel, Cement and 6 Coking Coal Mines for Iron Ore and Steel. In case of allotment, 5 Coal mines are for Power sector, 9 for sale of Coal and 1 for Iron and Steel. India’s coal production was 730.54 Million ton during 2018-19 with a growth of 7.9 %
Private players like Rungta Mines Limited, Jindal Steel and Power Ltd, JSW Steel-Energy, Essel Mining and Industries Ltd, Tatas, Sesa Goa, Vedanta Industries Ltd, Adani Group and global players like Rio Tinto, BHP Billiton, PesBody, Glencore and Vale are among those eyeing on Odisha’s Coal block, sources said.
Rating Agency, Crisil has predicted that after de-nationalisation of coal blocks, India’s import bill will be reduced largely. In fiscal 2020, India imported an estimated 180-190 million tonnes (MT) of non-coking coal costing over Rs 90,000 crore.
According to Crisil, commercial coal mining can help in reducing the annual import bill by nearly 50 per cent and India can save Rs 45,000 crore. India has one of the largest coal reserves in the world at 300 billion tonnes, yet it imports a fifth of its annual requirement. At present, two government-owned miners, Coal India and Singareni Collieries Company, produce over 90 per cent of the coal.
“Earlier, only captive consumers could commercially mine coal. However, the reforms initiative will lend a fillip to commercial coal mining because any private entity can now excavate on a revenue-sharing basis,” the Agency said. Others argued that once commercial mining picks up, independent thermal power plants and captive power plants can substitute their annual imports of 80-90 MT. However, 45-50 MT would continue to be imported by the thermal plants designed to operate only on such feedstock. He further said that incremental production from these mines will also help bridge the demand-supply gap and reduce imports over the medium term, they added.
Odisha being a foremost major mineral bearing State with deposits of coal, chromite, bauxite and iron ore has been enjoying the advantage of public sector mining by the OMC, NALCO, NTPC , MCL ,SAIL ,NINL.The people in coal bearing areas of Angul-Taclcher , Sambalpur-Jharasuguda-Sundargarh have been the worst sufferers of the environmental degradation and displacement due to coal mining and power plants and in coming day the people of these areas will experience the private mining companies for mining of coal and power generation. The other mineral bearing districts such as Jajpur, Keonjhar, Sundargarh and Mayurbhanj have been suffering in many ways and there has been no alternative sources of livelihood being developed for the locals of these area.
