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JAN 23 2017

Government may cap number of coal blocks a company can hold

  • Economic Times, ET Bureau / Hyderabad
  • Created: Mon 23rd JAN 2017

The government is considering capping the amount of coal blocks that a company can hold. The clause is part of the draft coal block allocation guidelines issued for public comments by the coal ministry and would apply to mines other than the 204 blocks that were canceled by the Supreme Court in October 2014.

The Centre may also specify the maximum number of coal blocks or amount of coal reserves or both that may be allocated to a company or corporation or its subsidiary or associate companies, the draft coal block allocation rules said. The draft rules have been framed to bring the provisions of Mines and Minerals Development and Regulation Act in line with the provisions of Coal Mines (Special Provisions) Rules, 2014, to bring uniformity in the coal block allocation.

The Mines and Minerals Development and Regulation Act of 1957 is the governing legislation of the coal sector. It was amended in 2012 to provide for competitive bidding in coal block allocations. The Coal Mines (Special Provisions) Act 2015 was brought in to auction the 204 coal blocks canceled by Supreme Court. Stakeholders comments for the draft allocation rules have been invited till February 20. The rules provide that in case coal block is allotted or secured by a project with supplies from Coal India, then entitlement to receive coal will be proportionately reduced.

The rules also limit the role of state governments and propose to invite representatives of the state government where the coal block is located, only if required. As per the draft rules, Centre may constitute a committee consisting of the joint secretary in the coal ministry as chairperson and members from various ministries for assessing eligibility for auction or allotment.


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