Based on the report of the B.K. Chaturvedi panel, which has recommended transfer of surplus coal only at a government notified price, the Coal Ministry will move a Cabinet note shortly to finally put in place a policy on disposing surplus coal.

The Chaturvedi panel, headed by Planning Commission member, B.K. Chaturvedi, has held the view that captive coal mining players should not be allowed to transfer surplus coal outside the end use sector to which they had been allocated for and any surplus coal with them should be transferred with either the nearest Coal India Limited (CIL) subsidiary or other firms in the same sector facing shortage of coal in linkage coal from CIL.

Officials in the Coal Ministry said they were still studying the report and would consult various Ministries before finalising the Cabinet note for the consideration of the Cabinet Committee on Economic Affairs (CCEA). There is also a view that the new policy will have to be notified after approval by the Cabinet through an amendment to the Coal Mines Nationalization Act 1973 and the existing 170-odd Letters of Allocation.

After CIL had expressed its reluctance to be a part of any coal-banking arrangement, the Planning Commission initiated discussions on the possibility of allowing private companies to transfer coal to each another. The Power Ministry had conveyed to the Committee as well as the Planning Commission that any coal banking system should not lead to profiteering among coal block holders.

The government has allocated a total of 218 captive blocks to companies between 1993 and 2011. Of these, 47 blocks have been de-allocated. Captive coal-mining companies were expected to produce 100 metric tonne by the end of the last five-year Plan period in March 2012. However, production from captive coal mines has remained stagnant at a level between 30 MT and 36 MT over the past four years, giving rise to a historic coal availability crisis. During the same period, CIL’s production has grown by 4.8 per cent to 452 MT.

The coal banking proposal will allow companies to transfer coal to another company, where the end-use project has been commissioned before the coal block, and receive the coal at a later stage.

The Government had set up a three-member committee headed by Planning Commission member B.K. Chaturvedi to examine issues related to utilisation of surplus coal from captive mines. The panel was asked to look into implications, legal issues and mechanisms of usage of surplus coal from captive blocks, all from the perspective of increasing domestic production.

The government has already circulated the policy on surplus/incremental coal for the views from the Ministry of Finance, Power, Steel, Railways, Department of Industrial Policy and Promotion, Law and Justice Department and an opinion had also been sought from the Attorney General on the issue. The matter deals with formulation of policy for disposal of surplus coal, coal rejects, washery by-products and other carbonaceous material by private/captive collieries and washeries.

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