As President Pranab Mukherjee on Tuesday promulgated the Ordinance moved by the Government for facilitating e-auction of captive mines for end-users in power, steel and cement sectors, it will not only allow greater investment in the coal sector, but will also facilitate the private sector to enter into commercial mining of coal thus breaking Coal India ltd's (CIl) monopoly. Official sources indicated that this could be allowed once the bidding of blocks is completed. The Ordinance, however, has been vehemently opposed by CIl's unions, which have even threatened to go on a strike.
While private companies which are mainly actual users in the aforementioned sectors will have to bid for blocks through e-auction, sources in the know told The Pioneer that public sector undertakings (PSUs) coming under the Centre as well as the State Governments, will be allotted coal blocks on priority basis.
There are two parts of the broad term of allocation of coal mines under the Ordinance - one part is auction and the other allotment. While private companies will have to bid for blocks through e-auction, PSUs will be allotted blocks on priority basis and at the same time they also have an option of participating in e-auction.
However, the criterion on which blocks will be allotted to PSUs is being worked upon. "The rules for allotment of blocks to PSUs are being framed," a source informed.As far as commercial mining is concerned, sources further said that the Ordinance has an enabling provision for the future, where under rules which are currently being framed, commercial usage of mines can also be thought of.
This, they added, will not only enable optimum usage of the valuable natural resource, but also allow private companies to sell coal.As of now only CIl, which is the world's largest coal miner as well as another PSU which falls under Coal Ministry, Singareni Collieries Company ltd (SCCl), are the only two entities which indulge in commercial mining.
Under the enabling provision in the Ordinance, private sector is allowed entry in commercial mining. Sources, however, pointed out that this may not happen anytime soon as the first priority of the Government is to auction off the 214 coal blocks which had been cancelled last month by the Supreme Court.Once the e-auction is over, sources indicated that the Government could think of allowing facilitation of private entities into commercial mining. The e-auction process is likely to happen in three to four months' time, as had been indicated by Finance Minister Arun Jaitley on Monday.
Incidentally in 1993, private sector participation in mining of coal for captive use by industries like steel, cement and power producers was allowed by the Centre. However, later the policy changed.CIl's trade unions during the course of the day, opposed the Government's decision to go in for e-auction of coal blocks for private parties and demanded its reversal while deciding to launch nationwide protests against "anti-people" policies next month.
All India Coal Workers Federation General Secretary Jibon Roy warned of a nationwide strike if the government implemented any enabling provision to allow commercial mining by private companies.
"To protest against the enabling provision and proposed e-auction, the workers would stage nationwide dharna on November 5 to 7," he said, demanding that the coal blocks be handed over to the State-run CIl.AITUC General Secretary and CPI leader Gurudas Dasgupta said the Government decision on coal blocks "has covert implications. It is a backdoor entry for taking over the entire coal sector by the private corporates".