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Govt to e-auction coal blocks, no commercial mining for now

The government on Monday decided to e-auction de-allocation coal blocks to private companies while maintaining state-run companies would be directly allocated mines.

The government on Monday decided to e-auction de-allocation coal blocks to private companies while maintaining state-run companies would be directly allocated mines.

However, contrary to expectations, the government stopped short of allowing full commercial mining, saying the ordinance proposed an “enabling provision” to allow such a move in future.

Coal exploration is nationalized in India through the Coal Mining Nationalization Act and only state-run companies such as Coal India can mine coal.

However, in 1993, the government had decided to allow private companies to take up “captive mining” — wherein end users of coal such as power, cement and steel companies were allocated blocks through a committee-screening process that was judged by the Supreme Court as “arbitrary and illegal” in September this year, while deciding to cancel the allocations.

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