Modi govt cancels allocation of six coal blocks in Jharkhand, Chhattisgarh, Maharashtra, Odisha

The coal ministry on Friday cancelled allocations of six blocks with state-run power generation companies of Jharkhand, Chhattisgarh, Odisha and Maharashtra. These coal blocks, with geological reserve of around four billion tonne, had been allocated to the states in the 2007-10 period to serve as fuel reserves for future power generation projects. However, none of these power projects saw the light of the day and no significant development has been made to operationalise these mines, leading to the ministry de-allocating the coal blocks.

While Jharkhand lost the Moury (225.4 million tonne reserve) and Kerandari BC blocks (916.5 MT), the Bhivkund mine (100MT) has been taken away from Maharashtra. The Pindrakhi (421.5 MT) and Puta Parogia (629.2 MT) blocks have been de-allocated from Chhattisgarh and Odisha lost the Bankhui (800 MT) block.

The development takes place at a time when captive coal production (25.1 MT in FY19) is still much lower than the peak output of 43.2 MT from 42 operational blocks in FY15, when the Supreme Court had cancelled 204 licences saying these were allocated in an illegal and arbitrary manner. The aforementioned de-allocated coal blocks were not cancelled by the apex court in its 2014 order. As many as 31 coal mines have been allocated through auctions so far after cancellation of the coal blocks.

It was not immediately clear when these cancelled mines of attractive capacities will be put up for auctions for private players. After a long gap of four years and amid rising coal imports, the Centre earlier this month managed to allocate five captive coal mines to private companies.

Coal minister Pralhad Joshi recently informed Parliament that the states have earned total revenue of Rs 4,975.7 crore from FY15 to October 2019 from captive coal production.

It was not clear if the revenue included royalty, cess and taxes that states earn from coal mining. The government had earlier claimed that coal-bearing states will get revenue to the tune of Rs 3.5 lakh crore over 30 years (about Rs 11,467 crore annually) from blocks allotted to central or state government companies.