Government mopped up Rs 8,964.75 crore till last month from the auctioned and allotted mines, according to the coal ministry. These revenue figures consist of upfront amount and monthly premium only, while royalty and taxes or cess are payable over and above these payments. Apart from 204 coal mines covered under the Coal Mines (Special Provisions) Act, the remaining blocks are allocated under the Mines and Minerals (Development and Regulation) Act.
Till date, 11 coal blocks under the MMDR Act have been allotted to various government companies, where two blocks are for commercial purpose and the remaining nine are for captive end-use. In 2015, the central government brought in the Coal Mines (Special Provisions) Act to re-allocate coal blocks cancelled by the Supreme Court in 2014. The Act ensured continuity in operation of the producing mines and bringing into production other mines expeditiously. It also amended the Coal Mines (Nationalisation) Act and the MMDR Act, thereby bringing uniformity in provisions of all the three Acts governing coal block allocation.
The Act permitted auction of coal mines for commercial mining by private entities. The proceeds of auctions shall accrue to respective states. The Act also provided that the land and mine infrastructure of prior allottee shall be transferred and vested in new allottee and compensation for land, and immovable mining infrastructure shall be paid to the prior allottee. Nationalisation of coal mines was undertaken in the 1970s to end unscientific mining practices and poor working conditions of labour in the private coal mines in the country.
With nationalisation, the coal sector became a closed market from an open market scenario. However, to meet the rising electricity demands within the country, the Nationalisation Act was amended in 1993 to allow private captive coal mining for generation of power and 206 coal blocks were allocated through a screening committee mechanism and the ‘government dispensation’ route between 1993 and 2011. Due to opaqueness in mechanism, the Supreme Court in 2014 declared these allotments illegal and arbitrary and cancelled the allotment of 204 coal blocks.
