Putting into action its grand plan of reforming the coal sector, the Government on Wednesday approved the re-promulgation of the coal ordinance which paved the way for auction of coal blocks, 24 of which would be put up for bidding on December 25.
The Pioneer on December 19 had first reported that the Government was planning to re-promulgate the ordinance. The ordinance was re-promulgated a day after the conclusion of the Parliament's Winter Session during which the Coal Mines (Special Provisions) Bill 2014, which had replaced the earlier ordinance, could not get through in Rajya Sabha after being passed in lok Sabha, owing to logjam in the Upper House on the religious conversions issue.
The Government plans to auction as well as allot all the 204 blocks which were cancelled by the Supreme Court. In the first tranch, the Coal Ministry plans to put up 92 blocks for bidding, with 24 of these going under the hammer on Thursday.
The Union Cabinet cleared re-promulgation of the coal ordinance and necessary guidelines for mine allocations and Coal Secretary Anil Swarup later told media persons in a press conference that the coal-rich states stand to earn Rs 7 lakh crore over the next 30 years. These states include Odisha, Jharkhand and West Bengal, which account for most of the 204 coal blocks.
"One calculation tells us that if the 70 per cent of the mining is for power. And 30 per cent is for non-power and if the extractable quantities are about 50 per cent. The total payment to the states in 30 years would be around Rs 3.5 lakh crore for 30 years from 204 blocks that have been cancelled by the Supreme Court," Swarup said.
In addition to this, an almost equivalent amount will also flow to the states' coffers by way of royalty, Swarup added. Out of the 24 mines which will be put up for auction on Thursday, seven blocks will be for the power sector, 16 for other end-use steel and cement plants as also captive power units, and one reserve will be for steel.
"Coal Ordinance was passed by the lok Sabha, but debate on it was not allowed in the Rajya Sabha. With the re-promulgation the unfinished process of allocation of coal blocks will resume again," Finance Minister Arun Jaitley said at a press conference after the Cabinet meeting.
Coal and Power Minister Piyush Goyal said that MSTC will be conducting the auctions, while SBI Cap is the transaction adviser. The entire process, he added, will be completed for the operating and ready to operate mines before March 31, 2015. This will be quickly followed with more mine in schedule three.
The auction and allotment will reduce imports, Goyal said, adding that the thermal coal import can also be brought down significantly and the government was aiming to eliminate it completely in the next 2-3 years.