Cabinet expected to approve coal blocks auction for private mining this fiscal year

Kolkata: The union cabinet is expected to give its approval to the proposal to auction coal blocks for private mining, coal secretary Susheel Kumar said in Kolkata on Wednesday. If things go according to plan, the blocks are to be transferred within the current financial year, he added.

A discussion paper on the proposal has already been released for feedback from stakeholders. “I am hoping it should happen in this financial year,” Kumar said, referring to the transfer of the auctioned blocks. More than four decades after nationalisation of coal mines, the union government is looking to put 5-6 coal blocks under the hammer for private mining.

One of the arguments for restarting private mining is Coal India Ltd’s (CIL) inability to scale up production at the same pace as the increase in demand. Kumar, however, said there was no shortage of the fuel at power stations. The problem is due to the inability to maintain enough stock, he claimed.

The Central Electricity Authority expects power stations to maintain a coal inventory that will last 22 days. Demand suddenly rose, and power plants were found having no inventory, Kumar said.

CIL’s acting chairman-and-managing director Gopal Singh said the state-owned miner had reduced its pithead stock, or the inventory of unsold coal, from 60 million tonnes (mt) at the beginning of the financial year to 29 mt currently.

CIL is pursuing a target of producing 600 mt in the current year, which may not be beyond the miner’s reach. Production has improved in September and October, Singh said. “The signs are positive,” he added.

Meanwhile, Singh said CIL is legally examining the show cause notice issued by the Odisha government to its subsidiary, Mahanadi Coalfields Ltd. The company is faced with a penalty of Rs20,169 crore for alleged violation of mining plans and environment laws.