Govt to hasten coal reforms
The Congress-led government wants to speed up coal reforms, which will include auctioning of mines among user industries. With the possibility of Jharkhand Mukti Morcha chief Shibu Soren becoming the coal minister looking dim, top officials said, the government would try to push through the reforms, which might usher in greater transparency in coal mine allocation. The government will also continue with its policy of controlling coal prices as part of a package to contain inflation. Coal is a key ingredient for steel and cement industries and an increase in its cost has been instrumental in the rise in prices of these two vital products. At present, the Centre allocates coal-bearing land to steel mills and power plants, but often questions are raised on the lack of transparency in such allocations.Officials said amendments to the Mines and Minerals (Development & Regulation) Act 1957 might be introduced as an ordinance to launch competitive bidding for coal blocks .Part of the money from the auction will be used for rehabilitation and community development projects in coal-bearing areas. This follows the spate of unrest in states such as Jharkhand and Orissa over land acquisition.The new bidding system will provide for financial stakes as well as penalties for not developing the mines.Competition among bidders will be in terms of production sharing. Those who offer the highest production share to a state will get the mine. Successful bidders will have to give a bank guarantee equal to three years of production share. If the mine is not developed in time, these guarantees will be encashed and the leases cancelled. At present, about 60 per cent of the country’s total energy requirement is met by coal. Coal-based power accounts for around 70 per cent of total electricity generation in India.
