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Allottees can't sell Coal from captive Mines to third party

The winning bidder of the three coal mines put up for auction will not enjoy any right to market, sell or export the fuel to any third party. The coal ministry has said that coal blocks offered to companies under the auction route will be solely for its specified end-use project.

The changes have been specified in the auction document to prevent companies from using captive use blocks for commercial gain by diverting surplus coal. Complaints in this regard have come over alleged sale of coal by Jindal Steel and Power from its captive mines in Chhattisgarh.

The coal ministry has further clarified that in the event there is more than one end-use plant, the coal produced in the mine shall be allocated to each end-use plant as the mine allocatee deems fit, provided all such plants have been commissioned and brought into commercial operations as per their declared capacities.

The coal ministry had in February initiated the auction process for putting two mines in Jharkhand and one in West Bengal on the block, having an estimated 500 million tonne of reserves, for captive use by steel, cement and sponge iron firms.

Source-On Request