India Recommends Canceling 172 Coal Mining Permits
India proposed cancelling 172 unused permits to mine coal, while allowing 46 operational mines to keep working to address a Supreme Court ruling that struck down all coal-mine allocations made since 1993.
The government is prepared to auction off new licenses for the cancelled mines, Attorney General Mukul Rohatgi said in his argument to court in New Delhi yesterday. The court said “it was leaving its options open” and set Sept. 9 for a final hearing.
The proposal would keep production of the fuel that powers more than 60% of India’s generation capacity going, while potentially jeopardizing several projects, including power plants, steel mills and aluminum smelters.
The government suggested the court impose an additional royalty of 295 rupees ($4.87) a metric ton for coal that has already been taken from the operational mines.
“Irrespective of what the decision is, it will be in the interest of the nation,” Coal and Power Minister Piyush Goyal said Aug. 25, after the court’s ruling, adding the judgment will help the sector move on.
Criticism of the procedure forced the previous government of Prime Minister Manmohan Singh in 2010 to amend laws and adopt an auction process. No auctions have actually occurred since the new policy was introduced.
India’s state auditor in 2012 found that allocating the mines to companies without an auction may have cost the government 1.86 trillion rupees, worth $33 billion at the time.
Source: bloomberg
