Coal blocks in India no longer ‘captive’; Steel, power firms may bid for mines

Dozens of captive coal mines with abundant reserves of the fuel could be up for grabs soon, without any end-use restrictions, as the Cabinet on Wednesday decided to promulgate an ordinance amending the relevant Act, with an aim to revive investor interest in the sector.

Essentially, the change will mean that domestic and foreign steel companies and also local power companies will also take part in the auctions to be held to reallocate the captive blocks cancelled by the Supreme Court in 2014. So far, only 89 of the 204 blocks cancelled by the apex court have been reallocated — including 60 assigned to PSUs on a nomination basis and 29 auctioned off — and just 29 of them are operational. While steel and power firms have interest in coal mining as it gels well with their businesses if unhindered open market sales of surplus coal is allowed, they have been largely shying away from the auctions held so far — even 25% open-market sales allowed in February 2019 were not enough to kindle their interest in these coal blocks.