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Monday, December 12, 2011

Coal minister opposes proposal for sale of coal by block holders

Monday, 12 Dec 2011

PTI reported that the Commission, in a letter to the ministry had suggested that incentives could be provided to block holders for the development and production from the mines by allowing them to sell coal.

Coal ministry has said in reply to the Plan panel that "The value of the mineral held by the captive coal holders is very high in terms of today's prices and block holders will be unduly benefited if permitted to sell coal. If the suggestion of the Planning Commission is agreed to it will pave the way, allowing captive block holders to make huge profits.”

Contending that only 28 coal blocks out of 193 allotted to various power, steel and cement firms in the past 18 years for captive use have come to production, the ministry is of the view that if they are permitted to sell coal they would not show interest in bringing up their end use plants.

The coal ministry said that "...If a part of these reserves are diverted... Block holders would again turn to government for making available equivalent amount of reserves for meeting their requirements sometime in future after extracting profit from reserve...If they start selling coal, they would never show interest in bringing up end use plant.”

Contending that the block holders were allotted mines free of cost for power generation, it added that the proposal of selling coal will not only lead to government's criticism but would allow firms to take undue advantage of the allocation.

(Sourced from PTI)

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