The Coal Mines (Special Provisions) Act, 2015
Immediately after the August 2014 SC decision that held 214 captive mine allocations illegal, the NDA Government brought an ordinance called Coal Mines (Special Provisions) Ordinance. Later, the ordinance was replaced by Coal Mines (Special Provisions) Act, 2015.
Salient Features
Objective
The objective of this act is to empower the government to allocate the coal mines on the basis of competitive bidding to ensure continuity in coal mining operations and promote optimum utilisation of coal resources.
Schedule-I, II and III mines
All the 204 mines whose allocation was cancelled by the Supreme Court, are defined in the act as ‘Schedule-I coal mines’. Out of these, the 42 mines which were already producing and ready to produce coal were defined as ‘Schedule-II coal mines’. Other 32 coal mines which are at various stages of development were defined as Schedule-III coal mines. These coal mines are meant for specified end-use and the Central Government has been empowered to move mines from Schedule I to schedule-III.
No end use restriction to participate in auction
This act provides that there shall be no end use restrictions on the eligibility to participate in the auction, other than for Schedule II & III coal mines, in which mines will be auctioned only for end use in power, steel & cement sectors.
Nominated Authority
The act empowers the Central Government to appoint a Nominated Authority under a person with joint secretary rank to conduct auction/ allotment and vesting and transfer of all interests, rights and titles of these coal mines in the successful bidder. Nominated Authority is assisted by experts and other officers.
Proceeds of auction
All proceeds of auction will be received by the Nominated Authority and will be disbursed to the respective states. The prior allottes will be paid compensation for land and immovable infrastructure developed by them prior to cancellation of their allotment. For disbursal of payments, a ‘Commissioner of Payments’ is to be appointed.
Other provisions
The central government is empowered to appoint custodian(s) for operation and management of the coal mines until they are allocated via auction. The act has provisions for rehabilitation and compensation for displaced persons. The act provides that any dispute shall be adjudicated by the Tribunal constituted under Coal Bearing Areas (Acquisition and Development), Act, 1957.
E-auction of Coal Mines- Current Status
By end of October 2015, the Government has conducted three rounds of auction of the coal mines. The first two phases of coal auction for 40 producing blocks were held between February to April 2015. These would fetch the coal bearing states a revenue of Rs. 2.85 Lakh Crore in a period of 30 years. Both power / non-power companies participated in this auction. The government also conducted a third round of auction in August 2015 but proceeds were only Rs. 4364 crore because of the legal issues that have tangled the mines put at auction. The government is currently working to chalk out the process and formalities of the fourth round of auctions.