Coal mining licences awarded in 1993 to 2010 are illegal, Indian Supreme Court rules

26 August 2014 (Last Updated August 26th, 2014 18:30)

The Indian Supreme Court has ruled that all of the captive coal mining licences awarded between 1993 and 2010 were illegal.

The Indian Supreme Court has ruled that all of the captive coal mining licences awarded between 1993 and 2010 were illegal.

Of the 328 blocks identified by the government, 218 mining blocks were illegally allocated to both private and government firms without performing competitive bids.

In its verdict, the apex court ruled that the successive governments allotted the mining licences with 'arbitrariness, lack of transparency, lack of objectivity and non-application of mind...gifting away precious resources as largesse'.

"I would look forward to finality in the matter of coal block allocations, which have for several years now kept the sector in limbo."

The ministry had earlier cancelled 80 mining licenceswhich failed to meet production milestones. According to the apex court, there are 41 companies holding 194 blocks illegally.

The Comptroller and Auditor General (CAG) in its 2012 report claimed that the country is estimated to have lost around $33bn due to illegal coal block allocation.

Companies such as Jindal Steel and Power, Hindalco, Tata Power, Sesa Sterlite and Reliance Power, amongst others were the most affected by the ruling as they have already spent billions of dollars on steel and power plants linked to the coal blocks.

The Supreme Court will hold another hearing on 1 September, following which it will either cancel the mining licences or impose fines.

India coal and power minister Piyush Goyal said: "I would look forward to finality in the matter of coal block allocations, which have for several years now kept the sector in limbo, and with the finality that one can expect very soon, I hope that the sector can start progressing.

"I respect the judgement of the Supreme Court and am also happy that they have set a date for further hearing."

Having produced 565 million tonnes of coal last year, India is one of the largest producers of coal in the world and most of its coal is used for commercial energy needs.

Energy