Next phase of coal block auction faces delay

Even as the government races towards auction of 100 coal blocks by the end of this fiscal, the pace is likely to slow down for the next batch of over 100 blocks due to lack of mining plan and other clearances for them.

The Supreme Court order canceling 204 mines had asked the government to auction 42 operational mines by March, 2015. The coal ministry is well on its way to not only auction the mandated 42 blocks but 58 more blocks in addition. Admittedly, the process has been helped by the fact that most of these mines were in some form of readiness with respect to its mining plan.

“100-odd mines that have not been considered for auction by March, 2015 were allocated on the premise that the allocattee will prepare the mining plan for these blocks. However, most of the mines have no mining plan as of now,” a coal ministry official overlooking the auction process told FE.

Mining plan is a document prepared by Coal Mine Planning and Design Institute (CMPDI) that includes information regarding coal reserves, land area, boundary demarcation and several other pieces of information essential before actual mining can start.

After allocation of coal blocks by the coal ministry, the allocattee companies demarcate the boundaries of the coal blocks on the ground on the basis of location plans/geological plans supplied by CMPDI.

Another coal ministry official that FE spoke to said that the ministry was debating if the government should obtain all clearances for rest of the mines before auction so as to further enhance the value of mines and also expedite the process. The experience from the current auction process will be incorporated in when 94 untouched mines are put on the block, he added.

“We haven’t decided what the plan of action will be for the rest of the blocks. We can either go for auction based on a notional reserve of mine and then make adjustment once the mining plans are made. The other option is to go for production sharing agreement with the successful bidder,” the government official overlooking the auction process said.