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The Coal Mines (Special Provisions) Bill, 2015

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Lok Sabha on 4th march 2015, Wednesday, passed the Coal Mines (special provisions) Bill, 2015 to allow e-auction of coal blocks after supreme court cancelled their allocation leading to uncertainty in coal sector amid by some oppositions.

key highlights:

  • Date of Passing: 4th March 2015 by voice note.
  • Date of introduction of bill: December 10, 2014 by the Minister of Coal, Piyush Goyal.
  • Some of the amendments were voted out, while some of the amendment were disapproved by voice note, CPI(M) member Badruddoza Khan’s amendment were voted out.
  • It seeks to amend the Coal Mines (Nationalization) Act, 1973 and the Mines and Minerals (Development and Regulation) Act, 1957.
  • The Bill’s main objective is to enable private companies to mine coal for sale in the open market.
  • The Coal Mines (Special Provisions) Bill, 2015, would replace two ordinances issued by the government
    • the first on October 21 last year and
    • Second in December, after the apex court cancelled the allocation of 204 blocks
  • Categories of mines: The Bill creates three categories of mines:

Schedule I

(i) All the 204 coal mines cancelled by the Supreme Court in August 2014,

(ii) Any land acquired by the prior allottee in or around the coal mines, and

(iii) Mine infrastructure.

Schedule II

(i) 42 Schedule I mines that are currently under production or about to start production

Schedule III

Mines includes the 32 Schedule I mines that have been earmarked for a specified end-use.

  •  A prior allottee shall not be eligible to participate in the auction process
  • if he has not paid the additional levy imposed by the Supreme Court, or
  • If he is convicted of an offence related to coal block allocation and sentenced to imprisonment for more than three years.
  • Coal and Power Minister Piyush Goyal said that this bill would ensure “transparent and honest” process of auctioning of coal blocks. He warned that if the Bill is not passed, then there could be a crisis in the coal sector with the closure of these mines.
  • e-auction has ensured open bidding and no monopoly in the process.
  • Adequate safeguards have been put in place to ensure the end-use restrictions and stop hoarding.
  • The Bill provides for allocation of coal mines and vesting of the right, title and interest in and over the land and mine infrastructure together with mining leases to successful bidders and allottees through a transparent bidding process.
  • Dipendra Hooda said all states have put money for development of coal mines over decades and if it is now generating some money then they should get the share of the profits.
  • The e-Auction proceeds from the first lot of mines are over 1 Lakh crore and Auctioning of second auction is in process.
  • The central government shall appoint a nominated authority who will be an officer of the rank of a joint secretary in the government
  • Prior allottees shall be compensated for land and mine infrastructure.  For the purpose of such compensation, land shall be valued as per the registered sales deed together with 12% simple interest from the date of purchase or acquisition, till the date of the execution of the vesting order.  Mine infrastructure shall be valued as per the audited balance sheet of the previous financial year.  Prior allottees shall not be entitled to compensation till the additional levy has been paid.
Penned by Prerika Gupta