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Govt’s scheme to permit coal block owners to surrender undeveloped mines

The Coal Ministry is reportedly planning to come up with a scheme to allow coal block allottees to surrender mines that are not in a position to develop due to technical reasons. This move is likely to boost coal supply at a time when domestic power producers are grappling to secure coal supply.

According to the Central Electricity Authority (CEA), as of September 29, 16 out of the country’s 135 coal-fired power plants had zero coal stocks.

The proposed scheme will allow surrender of coal blocks without imposition of financial penalty or penalty on merit basis after examining the proposal by a scrutiny committee.

Coal blocks surrendered under this scheme will immediately be offered for auction for commercial mining for putting the block to production early. The move would help in boosting the production of coal from the mines allocated through auction route.

According to the coal ministry, a scheme is being formulated to allow allottees to sell up to 50% of the coal produced after meeting its captive needs. This will incentivise domestic coal producers to produce more coal and sell in the market as international coal prices are way higher than domestically produced coal.

It may be noted that India’s total coal production registered a marginal decline of 2.02% to 716.084 million tonnes during the last fiscal year. The country had produced 730.874 million tonnes (MT) of coal in FY’20, according to provisional statistics of 2020-21 of the coal ministries.

Of the total coal production, 671.297 MT was non-coking coal and the remaining 44.787 MT was coking coal. Public sector produced 685.951 MT while the remaining 30.133 MT was produced by the private sector.

More information would be provided by the Ministry shortly.


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