New Delhi: Government is all set to introduce competitive bidding for allocation of coal blocks, a move that would benefit consuming industries like power and steel.
“A bill will be introduced (in the coming session of Parliament) for amending the existing act so that coal blocks can be allocated through the process of competitive bidding,” Coal Secretary H C Gupta told PTI.
The Minerals and Metals (Development and Regulation) Act 1957 governs the process of exploration, mining and allotment of coal and lignite blocks. The proposed bill seeks to amend this act.
“The move would ensure more revenues to the state government, in addition to the royalty they get from the coal extracted from the blocks,” he said.
At present, a screening committee under the coal ministry approves allotment of coal blocks for captive use to public and private companies, he said.
However, state-run companies will have an edge over their private counterparts as they could also be given coal blocks outside the bidding process.
“Though the government companies can participate in the process of competitive bidding, coal blocks can be given to them without being party to any such process,” he added.
At present, around 190 coal blocks with an estimated reserves of 41 billion have been allocated to various private and state-run companies. Government will be allocating around 90-95 captive mining blocks this year, out of which 70-75 would be of coal.
The total coal reserves in the country stands at about 257.3 billion tonnes, out of which proven reserves are estimated at around 94-95 billion tonnes.
Domestic power and steel companies have been voicing for speedy allocation of coal blocks to meet their production targets in time.