The Center has formed an Empowered Committee of Secretaries (ECoS) to address issues related to the auction process and the operation of coal blocks allocated to commercial mining.
The development comes soon after the government has stated that it can launch the process of auctioning coal blocks for commercial mining on 11 June.
“It has been decided with the approval of competent authority to set up an Empowered Committee of Secretaries to deliberate and decide/recommend on the certain matters pertaining to auction methodology and associated matters, issues in operationalisation of blocks allocated for sale of coal,” according to an official memorandum of the coal ministry.
The four-member panel will be composed of Secretaries from the Departments of Economic Affairs and Legal Affairs as well as Ministries of Energy, Petroleum and Gas.
The empowered committee will also review the two-stage bidding process for successive auction rounds.
“In case mine/mines remains unallocated in the auction tranches held hereinafter, the same would be placed before ECoS for appropriate reduction in the floor percentage of revenue share and other terms and conditions,” the ministry said.
In the event of a single bid after successive rounds of auctions for a coal mine, ECoS may take correct decisions on the allocation of the mine.
It will also review and determine the incentives that may be allowed for early production and coal gasification or liquefaction for successive auction tranches.
The empowered panel will also “determine the limit of maximum number of coal mines or reserves or any other parameter regarding production of coal or any other combination thereof that can be allocated to a company or its affiliate, associate company, holding company or subsidiary company in subsequent tranches of auction.”
It will also discuss issues relating to the operationalization of the National Coal Index (NCI), including representative pricing modalities for successive tranches, and make changes to the parameters of efficiency, including flexibility in production as per the requirement to consider the basic conditions for successive tranches of auctions.
The appointed committee was also required to update the cap of the upfront sum for future auctions in the event of a major upward / downward adjustment in market conditions.
Approximately 50 coal blocks are expected to be auctioned for commercial mining.
