PSUs to be provided one-time window to surrender non-operational coal mines

New Delhi, April 8

o surrender non-operational coal mines without penalty, according to a decision taken by the Cabinet Committee on Economic Affairs (CCEA).

Accordingly, the decision may release several coal mines which the present government PSU allottees are not in a position "to develop or are disinterested" and "could be auctioned as per the present auction policy".

"A three months' time will be granted to the allottee government companies to surrender the coal mines from the date of publication of the approved surrender policy," an official communique said.

After the cancellation of coal blocks by the Supreme Court in 2014, the Centre allotted many such mines to state and Central PSUs via the allotment route to prevent disruption of coal supplies to thermal power plants.

"The allocation route was expeditious and it was expected that the coal requirement of 'State GENCOs' would be met from those blocks. The revenue share payable by state or central PSUs is fixed on per tonne basis unlike private sector who have to bid."

"Given the context of allocation of coal blocks at that point of time, conditions for timelines for operationalisation of coal blocks were very stringent and firm, leaving 'no wriggle room' either to the successful allottee or the nominated authority. Penalisation for delay in operationalisation of coal mines has resulted in disputes and court cases."

Till December 2021, 45 out of 73 coal mines allotted to government companies have remained non-operational and the due date of commencement of mining operations in case of 19 coal mines are already over.

"Delays were due to reasons beyond the control of allottees, for example, law and order issues; enhancement in the area of forest from what was declared earlier; resistance of land-holders against land acquisition; geological surprises in terms of availability of coal resources."

Additionally, the communique said that "good quality" coal blocks which were allotted early can be quickly recycled back after removing technical difficulties and adjusting boundaries and offered to interested parties under the recently launched commercial coal mines auction policy.

"Early operationalisation of coal blocks will provide employment, boost investment, contribute to economic development of backward areas in the country, reduce litigation and promote ease of doing business leading to reduction in import of coal in the country."