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Government ends coal block lease issues; 10 mines to start operations by March 2016

Economic Times:  October, 2015

New Delhi: The government has ironed out issues related to transfer of mining leases and grant of forest clearances to coal block winners and expects commencement of operations in about 10 more mines by March next year, easing coal availability to the projects attached to these mines.

Chhattisgarh has altered rules to exempt companies that have won coal mines in the state from paying levies as high as 10-15% of the blocks' value for granting mining leases and registration. In a cabinet meeting held on October 8, the state changed this to a lower registration fee and stamp duty, a senior coal ministry official said.

Development of auctioned coal blocks, including four producing ones, in the state was hit as bidders were asked to submit stamp duty based on the value of the mines arrived during auctions. Companies had secured the blocks, particularly the operational ones, at exorbitant prices after aggressive bidding.

The state has now moved back to the earlier method of collecting the registration fee and stamp duty on the basis of royalty, the official said.

Owners of coal blocks in Jharkhand were asked by the state to pay higher charges for land transfer. The coal ministry on October 13 issued a clarification informing six host states, including Maharashtra, Madhya Pradesh, Odisha and West Bengal, that the land cannot be valued afresh and has to be transferred at the previous prices. It told the states that the coal block allotment orders provide for vesting of land and has asked the authorities to expedite the grant of clearances.

Coal ministry official said the environment and forest ministry has allowed coal miners to mine in non-forest part of coal blocks without a forest clearance.

"A separate mining lease can be executed for mining in non-forest land and the companies need not wait for forest clearance for commencing operations," the official said. Of the 16 operational blocks auctioned out of a total 34, only seven have started operations so far. However, the official said with resolution of issues causing delays, all the 16 blocks are likely to start production by the end of this financial year.

The government has auctioned 29 coal blocks in the first two tranches and five in the third to private companies, garnering well over Rs2 lakh crore.