core sector communique

Allocation of Coal Blocks

As on date a total of 208 coal and 28 lignite blocks have been allocated to government and private sector companies with combined geological reserves of about 50 billion and 1.8 billion tonnes respectively. A large number of the coal/lignite blocks have been allocated after 2005. Development of coal/lignite blocks involves a gestation period of 3 to 7 years for reaching the production stage and another two to three years for reaching the optimal production capacity. As per the guidelines, coal production from a captive coal block should commence within 36 months (42 months in case the area falls in forest land) in case of open cast mines and in 48 months (54 months in case the area falls in forest land) in case of underground mine, from the date of allocation. If a coal block is not explored, additional two years are allowed for detailed exploration and three months for preparation of geological report. The allocatees of coal blocks, who have not started production so far, are in various stages of obtaining statutory clearances and mining lease, preparing mining plan, acquisition of land, procuring machinery and equipment etc. for both mining as well as end-use project. This information was given by the Minister of State for Coal (Independent Charge) Shri Sriprakash Jaiswal, in a written reply to a question the Rajya Sabha today.

He said that the responsibility of developing the coal block as per the prescribed guidelines and milestone chart attached with the allocation letter rests entirely with the allocattee company. In the terms and conditions of the allocation letters, it is categorically mentioned that in the event of willful delay in the development of coal blocks and in setting up of the end use project, the Govt. would take appropriate action to de-allocate the said block. Government periodically monitors and reviews the development of allocated blocks as well as end use plants by the allocattee companies in the review meetings. Wherever delays are noticed, show cause notices for deallocation or advisories are issued to allocattees cautioning them to bring the coal blocks into production as per the guidelines/milestones chart.

Based on the review undertaken by the review committee in the meeting held on 20.7.2010 and 21.7.2010, it was noted that the progress in respect of some coal/lignite blocks was less than satisfactory against the milestones set out and the allocatees were not able to develop the allocated blocks according to milestones prescribed. Accordingly, it has been decided to issue show cause notices to 45 coal blocks allocatee Government companies including NTPC and 48 coal blocks allocatee Private companies. The committee recommended issue of advisory for 5 coal blocks allocated to govt. companies, 7 coal blocks allocated to private companies and 7 blocks allocated under tariff based competitive bidding. The committee has also recommended issuing 4 show cause notices and 4 advisories in respect of lignite blocks, the Minister added.