Orissa to Centre: Allocate coal blocks exclusively to state-run miner

A few weeks after it brought a resolution giving state-owned Orissa Mining Corporation (OMC) first right over areas containing major minerals such as iron ore, bauxite and chromite, the Naveen Patnaik government has written to the Centre to allocate areas containing coal to OMC alone.

Replying to the coal ministry's draft terms and conditions for allocation of coal blocks to government companies for the purpose of mining under Rule 4 of the Auction by competitive bidding of coal mines rules 2012, the state government on Saturday wrote back that the area containing coal should be allocated only to government companies under the control of host coal-bearing state.

The Centre had circulated the draft terms among all the states on September 3 this year. Last month, the Orissa steel and mines department had brought out a resolution saying mines which have not been leased out would henceforth be given to OMC.

Replying to another draft clause of the ministry that coal produced from blocks would be distributed through long-term contracts or linkages to specified end users, Orissa listed out four categories of plants which should be given coal.

The first category would be utility power plants of the state and Central companies and independent power producers having long-term power purchase agreements with distribution companies or Grid Corporation of Orissa. It said priority should be given to the power plants located in the host state.

The second category plants would be steel, cement and other specified end-users including their captive power plants. The third category specified by Orissa are micro, small and medium enterprises requiring coal.

The fourth category listed by the state are non-specified end users and merchant power plants who do not have any long term power purchase agreements.

Regarding the fixation of price, the state government replied that it should have the freedom to decide the percentage of coal the allocatee company be sold at its chosen rate as well as e-auction basis.

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