Hyderabad: The launch of auctions for commercial coal mines across the country at Hyderabad on Friday (June 21) became the platform for the Telangana government to air its grievance over the loss of its authority over the state’s rich coal reserves.
The exploitation of coal, water and other natural resources by capitalists from Andhra was a major issue in Telangana’s statehood movement.
The auctions were launched for the first time outside New Delhi at the instance of the new Union minister for coal and mines, G. Kishan Reddy, who incidentally was on his maiden visit to his home state after assuming office.
This is the tenth round of auctions for 67 coal blocks in eight coal-bearing states – Bihar (three blocks) , Chhattisgarh (17), Jharkhand (seven), Madhya Pradesh (17), Maharashtra (one), Odisha (18), Telangana (one) and West Bengal (three).
In the nine rounds of auctions so far since Prime Minister Narendra Modi launched the first one virtually during the COVID-19 pandemic in June 2020, as many as 107 blocks were auctioned and 11 of them became operational.
It took 51 months to get 17 clearances from the state and Union governments to commence production at the mines.
The Union government took the auction route to allot coal blocks in the country on the Supreme Court’s directions after it was found that allotments made earlier to entities on a first-come-first-serve basis bred corruption.
Both private and public sector undertakings were given an option to participate in auctions.
The former Bharat Rashtra Samiti (BRS) government refused permission to the 135-year-old Singareni Collieries Company Limited (SCCL), a state-owned coal company that is solely involved in coal excavation, to participate in the bidding for one of the auctions held two-and-a-half years ago.
Then-chief minister K. Chandrashekar Rao wrote a letter to the Union government asking it to stop the auctions and allot the four new coal blocks in the state at Sattupalli, Koyagudem, Sravanapalli and Tadicherla to the SCCL on a nominations basis. But there was no response.
Mallu Bhatti Vikramarka with Union coal minister Kishan Reddy (right). Photo: X/@kishanreddybjp.
The reason given by the government for not taking part in auction was that the SCCL being a government company could not compete with private players in the bidding process due to financial constraints. The BRS government even sponsored a three-day strike in its coal mines, alleging the sector was being privatised.
The Union coal ministry then went ahead with the auction of mines at Sattupalli and Koyagudem in the first instalment concerning Telangana.
The private companies that cornered these blocks have been unable to commence production so far due to a lack of expertise.
In this context, a third block at Sravanapalli, in the midst of existing mines at Srirampur-Mandamarri, was put up for auction. But, the company had not taken a decision yet on participating in the auction, though the new Congress government had in principle given the company the go-ahead.
The allotment of the fourth block at Tadicherla was agreed to be made to the SCCL by a special permission facilitated by an amendment to Mines and Minerals (Development and Regulation) Act, 2015. The amendment allowed the Union government to allot new mines by the reservation method.
Otherwise, the SCCL would have had to necessarily participate in auction as per the amendment.
In this context, the Telangana government has made a renewed appeal to the coal ministry to transfer the Sattupalli and Koyagudem blocks to the SCCL as the private companies could not handle the permissions.
It said the company will fulfil all conditions laid down for the excavation of mines.
Meanwhile, the BRS has again raised its demand to stop auctions. Party working president K.T. Rama Rao alleged that the two national parties – the Congress and the BJP – were hand-in-glove in wanting the privatisation of the coal sector.
The SCCL management has highlighted that the company was in a critical position to deliver its service of meeting the state’s energy requirements by producing the required fuel.
Prior to the amendment to the Act, the SCCL was granted 44 mining leases in four erstwhile districts in Telangana under a tripartite agreement between the state and Union governments and the company management.
Singareni presently has 39 mines and fell behind production by 20 million tonnes in meeting energy demands. Photo: X/@PRO_SCCL.
The state government owned a 51% stake in the company, while the Union government owned 49%.
The leases covered 600 sq km in the Godavari-Pranahita river valley area with permission to extract 3,000 million tonnes of coal from 388 sq km.
But only 1,585 million tonnes of coal have been exhausted so far, leaving 1,422 million tonnes remaining.
The company presently has 39 mines and fell behind production by 20 million tonnes in meeting energy demands.
Telangana deputy chief minister Mallu Bhatti Vikramarka, who also holds the energy portfolio, presented a grim picture of the company at the launch of latest round of auctions on Friday. He said the SCCL’s mines could shrink to eight and the head count of workers to 8,000 from the present 42,000 in 15 years if the Union government did not come to its aid.
The SCCL had nearly one lakh workers – next only to the workforce of the State Road Transport Corporation – three decades ago when the company was extracting coal mainly from underground mines, which required a large workforce as operations were carried out manually.
As the company began shifting to capital-intensive open cast mines that depended on machinery rather than workers, the strength of workers depleted.
Now, the company is facing the threat of closure due to the thrust on auctions in the allotment of coal leases, senior officials explained.
Coal minister Reddy promised to reallot to the SCCL a mine at Naini in Odisha that has a very large production capacity. The mine will meet 15% of the company’s target.
He blamed the BRS government for restraining the company from taking part in auctions.
Coal secretary Amrit Lal Meena said 50% of coal imports could be substituted by internal production in the country by expanding mines. He said there was not a single court case in the nine rounds of auctions so far.
The nominated authority of auctions and additional secretary in the ministry, N. Nagaraju, said the auctions were fully automated and that there was no human intervention.
Minister of state for coal and mines Satish Chandra Dubey was also present.
Several bidders, including some big players, participated in the auction.
