Govt going ahead with auction of three 'captive' coal blocks

The government will auction three captive coal blocks to companies engaged in production of steel, cement and sponge iron after obtaining necessary clearances and detailed exploration of the blocks by interested companies.

''The government will endeavour to auction coal blocks after detailed exploration and obtaining necessary clearances to add value to the auction process, enhance bankability and to ensure timely production from the coal blocks,'' the Outcome Budget 2014-15 (Ministry of Coal) tabled in the Parliament on Tuesday said.

The process for allocation of mines through auction is under way, it said.

''Notice inviting application was issued on 26 February 2014, offering three coal blocks for mining to companies engaged in production of steel, cement and sponge iron,'' it added.

The coal ministry had offered three blocks for auction for captive use for steel, cement and sponge iron companies - two in Jharkhand and one in West Bengal. The mines have total reserves of 500 million tonnes.

The allocation of 'captive' coal mines for the use of particular companies came under a cloud after the Comptroller & Auditor General of India had earlier said allotment of 57 mines to private firms without auction had resulted in a notional loss of Rs1.8 lakh crore to the exchequer.

Last year, the government had allocated 17 coal mines to central and state public sector units, including four to the National Thermal Power Corp (NTPC), the country's biggest electricity producer.

It had planned to auction 54 coal blocks with total estimated reserves of about 18 billion tonnes.