In its bid to promote the ‘Aatmanirbhar Bharat Program’, the Government of India has decided to offer 41 coal blocks in its first auction, to end the monopoly of Coal India and to curb dependence on other countries for its import. The program, launched by Prime Minister Narendra Modi on 18 June 2020, will be implemented under the aegis of the Ministry of Coal, under the provisions of Coal Mines (Special Provisions) Act and Mines and Minerals (Development and Regulation) Act.
Despite having the fourth-largest reserves of coal, India imports a significant amount of coal every year due to high dependence and lack of domestic availability. In the financial year ’20, India imported 251 million tons (MT) of coal worth Rs 1,58,685 crore. However, the government has planned to substitute 135MT of imports with the opening of the coal sector. The blocks are located across central mainland, in the states of Madhya Pradesh, Chhattisgarh, Jharkhand, Orissa, and Maharashtra. The auction will be based on a revenue-sharing model, rather than on a ‘fixed rate per ton’ basis as was done earlier. In order to augment coal production, the upfront (advance) amount of payment and performance and bid security have also been reduced. Under commercial mining, no restrictions will be imposed on private companies regarding the sale of coal.
“This decision of the Modi government will create more than 2.8 lakh jobs, attract capital investment worth 33,000 crores and generate annual revenue of Rs 20,000 crore for the state governments,” Home Minister Amit Shah tweeted. An official statement said that at the peak of its production capacity, these blocks will produce 225 million tons of coal− about 15 percent of the country’s projected total coal production in 2025-26. “Commercial coal mining auctions are completely different from the earlier regime of restricted sectors, use, and price. Now, there are no such restrictions at all. The auctions have terms and conditions which are very liberal, allowing new companies to participate in the bidding process, reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100 percent FDI through automatic route allowed and reasonable financial terms and revenue sharing model based on the National Coal Index,” Coal Ministry said in a statement. Ramanuj Kumar, partner Cyril Amarchand Mangaldas, further added, “The launch of the auction process for commercial coal mining is a transformative reform in the energy sector. However, environmental concerns related to coal projects and permitting delays are likely to result in muted interest from international investors. We expect strong interest from domestic mining and power companies since bid terms are attractive as compared with other mineral auctions.” PM Modi, while addressing the launch event, said that it must be kept in mind that India’s commitment to protecting the environment does not become weak due to the implementation of these coal reforms. India plans to gasify 100 MT of coal by 2030, which will require an investment of Rs 20,000 crore. Such steps will help in protecting the environment, he added. Shares of Coal India Ltd. rose almost eight percent in intraday trade on the Bombay Stock Exchange after the launch on 18 June 2020.
Ex-NDA Minister Dilip Ray Gets Three Years Imprisonment in Coal Scam Case
On Monday (26 October 2020), the Former Union Minister Dilip Ray has been awarded a three-year jail term by a special Court of Delhi. Ray was awarded jail term in a coal scam case pertaining to irregularities in the allocation of a Jharkhand coal block in 1999.Other than Dilip Ray, the special CBI Court also handed a three-year jail sentence to Pradip Kumar Banerjee and Nitya Nand Gautam, who were the senior officials of the Ministry of Coal at that time, and to Castron Technologies Ltd’s...
SC seeks Center’s reply on Jharkhand plea against coal block auction for commercial mining
Judiciary
Jul 15, 2020
Saumya Srivastava
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Editor: Ekta Joshi
)
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The Supreme Court issued a notice to the Central Government on Tuesday (14th July) seeking reply to the concerns raised by the Jharkhand Government through a plea against auction of coal blocks for commercial mining. The apex court has given 4 weeks to the Center to file its reply.Jharkhand had filed a plea against the coal block auctions meant for commercial exploitation. One, in the plea it was argued that before any commercial coal mining can begin, its social and environmental impact needs...
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