The government will soon decide on the number of coal blocks to be auctioned or allotted over and above the 74 mines that will be put up for sale in the first lot of bidding on February 11. The government had recently announced auctioning of 74 blocks in the first phase, including 42 blocks, which are already into production and 32 which are ready for production. The government wants enough number of coal blocks to be made available for power firms because 74 mines are seen as insufficient for the sector.
As per Coal Secretary Anil Swarup, the government is in the process of finalising the exact number of additional mines on the basis of the nature of the blocks. He further added that the allotment will be for government entities, while auction will be held for private entities.
Meanwhile, there will tighter monitoring norms for mine developers in the auctions and the government intends to cap the number of coal blocks applicable for public as well as private sector entities. Also, the developers will have to furnish a performance bank guarantee, which can be encashed if they fail to meet work commitments. However, the draft rules propose to allow a successful bidder or allottee to use the coal mined from a particular area in other similar end-use plants owned by it, after prior intimation to the Union Government.
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