SC reserves verdict on illegal coal blocks

  • Agencies, New Delhi
  • Updated: Sep 09, 2014 23:35 IST

The Supreme Court Tuesday reserved its verdict on the fate of 218 coal blocks which it had declared illegal.

The apex court bench headed by Chief Justice RM Lodha reserved the verdict after a day-long hearing on the consequences of its earlier decision, holding that the process of the allocation of these coal mines 'arbitrary and illegal'.

At the outset of the hearing, the central government told the court that it favoured auction of all the 218 blocks, but if the court so considered then 40 coal blocks which were already in production for years and six other coal blocks which were ready to begin production could be exempted.

Attorney General Mukul Rohatgi said that if coal block allocations are cancelled, the government was ready to re-auction the blocks.

Rohatgi also said that if all blocks are cancelled, state giant Coal India should be allowed to take over active mines, or companies be allowed to continue production until the blocks are re-auctioned, in order to avoid supply disruptions.

The court last month held that the method of granting coal mining concessions from 1993 to 2011 was illegal, putting investments worth billions of dollars at risk and threatening to worsen a national coal shortage.

The blocks include about 40 that are producing coal, estimated to have a capacity of about 9% of the 566 million tonnes the country produced last year.

A decision to cancel the blocks would hit firms including Jindal Steel and Power Ltd, Hindalco Industries Ltd and Sesa Sterlite Ltd, which have spent heavily on steel and power plants based around the coal blocks.

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