Coal production from the captive blocks has not been up to the mark which were allocated in order to augment domestic availability of the fuel.
These blocks are subjected to further delays after the coal ministry has granted relaxation to the allottees as they face hurdles in attaining the necessary clearances to commence mining operations.
In view of the force majeure event due to the second wave of Covid, the non-operational mines have been given relaxation of three months for attaining their efficiency parameters.
Similar provision of three months is also in place for the production schedule in case of operational mines which would be adjusted on a pro-rota basis for FY’22.
Measure taken to escape penalty
The relaxations are expected to slow-down the progress being made but these were particularly important for the allottees in order to avoid pay-out on account of the delay.
A total of 44 coal mines have been facilitated with the relaxation, which includes 15 mines that were secured in the first tranche of commercial mining auctions.
Request made for mines sold under commercial mining scheme
It is important to note that the mine development programme functions in tandem with the norms underlined in the efficiency parameters. In case of fully explored blocks, the timeline for completion of these milestones is 51 months, while that for partially explored blocks is 66 months.
Failing which, the mine owner is subjected to deduction in the amount that is paid towards the performance security. On the other hand, when the mine is successfully operationalised within the stipulated period, then the amount of performance security appropriated for delay in completion of any previous milestone would be refunded.
In similar lines, the owners having operational mines are compelled to pay revenue for the deficit quantity in the event of shortfall in the annual coal production as per the mining plan.
Consequently, captive miners such as NTPC, Hindalco, BALCO, Sunflag Iron and Steel, Ambuja Cements and Reliance Cements have sought relaxation in their production schedule for their operational mines.
Latest development
In a major move, the Andhra Pradesh Mineral Development (APMDCL) has set the stage to launch coal mining at Suliyari coal block in Madhya Pradesh. Notably, this is the first time the company has begun coal exploration in a state other than Andhra Pradesh.
In Odisha, National Aluminium Corporation (NALCO) is optimistic of starting mining operation from Utkal-D coal block in this financial year after securing mining lease for the block.
Moreover, National Mineral Development Corporation (NMDC) is planning to enter the coal mining space, with the miner set to start production from the allocated blocks by the third quarter of FY’22.
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