Commercialization of Coal Mines: Centre to Auction 10 Mines

As the movements against the coal mines in the various states of the country continue, the Centre has decided to offer 10 mines from different states for auction.

Chendipada, Chendipada-II, Mahanadi and Machhakata from Odisha, Shankarpur Bhatgaon II extension, Durgapur II/Taraimar, Durgapur II/Sariya and Madanpur from Chhattisgarh, Dongri Tal-II from Madhya Pradesh, Mednirai from Jharkhand are the coal mines on auction.

Weakening the 41-year-old state-owned Coal India Limited (CIL), the government is paving stones for the total commercialization of coal mine industry. Earlier, the BJP government had stated that the mining sector would be opened for commercial mining in the year 2017-2018. Besides, the CIL was forced to limit its production target for 2017-2018 from 660 MT to 600 MT due to the dull demand.

Among these coal blocks, Chendipada has 1244.37 million tonnes (MT) extractable reserve presently owned by CIL. Machhakata, Shankarpur Bhatgaon II Extension and Mednirai have extractable reserves of 474.34 MT, 80.14 MT and 80.832 MT respectively.

In 2015 February-August period, three phases of auction took place for nearly 45 blocks of coal. But it was only for the confined use of company and strictly prohibited the sale of coal on a commercial basis as per the Coal Mines (Nationalization) Act. The same year, the Coal Ministry had made yet another move to auction 214 coal mines which were deallocated as per the Supreme Court order of September 24, 2014. The companies would have to return the coal blocks by March 2015, as per the order of the Apex court.

Subsequently, the BJP-led Centre had passed Coal Mines (Special Provisions) Bill, on 4th March 2015 to overcome the backlash which they had faced from the Supreme Court. The new Bill was to amend the Coal Mines (Nationalization) Act, 1973 and the Mines and Minerals (Development and Regulation) Act, 1957.

Will the auction processes end the upper hand of state-owned CIL over coal mine?

The Bill itself allows “to take immediate action to auction or coal mines to minimise the impact on core sectors such as steel, cement and power, which are vital for the development of the nation”.

On the other hand, thousands of people from the different parts of the country are protesting against the mines as it is affecting the livelihood of people. Hundreds of tribal villagers and activists of Kosampali village in Chhattisgarh are very vigilant about every move from the Coal India officials who attempt to reopen the mines in the area. The mines in the area have changed the picture of the villages and livelihood of the villagers.

Kosampali and Sarasmal, home villages of Adivasi communities, are still protesting against the South Eastern Coalfields Limited (SECL) which is the second highest-producing house of CIL. Earlier, the mines were with Jindal Steel and Power Limited (JSPL).

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