Coal Ministry decided to Bar Captive Coal Miners from Raising Production Beyond Approved Level

The coal ministry decided to bar captive coal miners from raising production beyond the approved level, rejecting industry demands and the proposal from the Planning Commission to allow excess output to ease fuel scarcity.
The coal ministry prepared a policy, under the policy, surplus coal should be sold to state-run Coal India Ltd at price lower than production cost.

According to the ministry, the Coal Mines Nationalisation Act of 1973 allows coal from captive block to be used exclusively for specified end use project and production of surplus coal should not be allowed to result in any undue advantage to captive block owner. The policy said coal so transferred to Coal India Ltd should disposed by e-auction.

The government is believed to be concerned about misuse of diversion of excess coal to other projects. Of 193 coal blocks allotted over 18 years to companies for captive use, only 28 are in production. Against a target of more than 90 million tonnes, only 38 million tonnes is being mined out from these mines.

In this context it is worthwhile to mention that the CAG has questioned a special dispensation to Reliance Power to use excess coal from mines attached to Sasan ultra mega project in another private power project. The matter has been referred to Attorney General for opinion.

Coal deficit in India is likely to grow to 137 million tonnes by end of fiscal 2011-12. Due to domestic coal shortage, power projects commissioned after March 2009 are operating at sub-optimal capacity.