The Coal Ministry has been asked to move a Cabinet note for inter-Ministerial consultations for formulating a firm policy on usage of surplus coal from the captive mines, which has been an issue of contention between those who have been allocated coal mines and sections of the government.

The Ministry of Coal, which had set up a Committee of Secretaries (CoS) to study the issue and give appropriate advice, had sent the draft note to the Cabinet Secretariat for consideration. The Cabinet Secretariat on July 16 asked the Coal Ministry to place the formulated policy before the competent authority after due inter-Ministerial consultation.

“Following the advice of the Cabinet Secretariat, it has been decided to move a Cabinet note on the issue for inter-Ministerial consultations and it will take some time for the views to be captured and placed before the Cabinet in a cohesive manner,’’ a senior Coal Ministry official said.

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.

The need for a policy on such an issue has arisen as the basic concept of captive mining by private companies permitted in pursuance of section 3(3) of the Coal Mines (Nationalisation) Act 1973 is that the coal obtained from a captive block shall be used entirely and exclusively for the specified and approved end use by the allocate company. However, the Ministry of Coal had received several representations from captive coal companies regarding disposal of coal rejects, washery products and surplus coal.

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 annual domestic demand for coal is over 770 million tonnes as against last fiscal's production of 557.60 MT. The deficit of over 200 MT, met through imports, resulted in doubling of the coal import bill to $18 billion in 2012-13.