India says it will auction coal mines for steel mills, power plants and cement factories for captive use.

Currently, federal government allocates coal-bearing areas to steel mills and power plants. A government spokesman said amendments to the Mines and Minerals (Development & Regulation) Act 1957 would be brought before the Parliament to introduce competitive bidding for coal blocks.

According to a Coal Ministry note, the competitive bidding would be based on technical, physical and financial parameters.

Part of the money from the auction will be earmarked for rehabilitation and community development projects in the coal-bearing areas, which are mostly on tribal lands.

There has been unrest in the past in coal-rich states such as Jharkhand and Orissa over land acquisition.

Under the new law, the blocks will not be allocated unless they are explored in detail and quality and quantity of extractable coal reserves assessed. The cost of this exploration will be recovered from the winning bidder, the note said.

The note said new bidding system will provide for both financial stakes as well as penalties for not developing the mines.

source news : earthtimes.org

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