India's government late Monday, October 20, announced plans to auction coal mining rights to private steel, power and cement companies, four weeks after the country's Supreme Court cancelled the allocation of 214 blocks.
The Cabinet on Monday announced both blocks and facilities built on de-allocated blocks will be acquired under an ordinance, then offered via a reverse bidding process to private companies over the next three-four months, a government source said.
State-owned firms like NTPC and state electricity boards will be allotted a fixed number of mines, while private sector steel, power and cement companies can submit bids for the rest, the source said.
There will be no right of first refusal for original block holders, and they will have to compete to retain blocks.
The Supreme Court on September 24 cancelled 214 of 218 coal blocks allocated, deeming the allotments illegal and asking the central government to take over the 42 affected operational mines.
The source said the government was also working on guidelines with a view to implementing changes to commercial mining laws that would enable private companies to enter the coal mining and trading sector without hurting the interests of state-run Coal India Limited, the source said.
Moves to facilitate the entry of private interests into India's coal sector are aimed at boosting domestic coal production, which remains stagnant under Coal India Limited's management despite surging demand.
The country's coal exports are forecast to rise to more than 185 million mt in the current fiscal year ending March 2015 from 168 million mt in fiscal 2013-14 in a bid to cover the shortfall.
