<div>Putting up a brave front, the government of India told the Supreme Court on Monday (1 September) that if the court deemed fit, it should cancel allocation of all coal blocks it classified as illegal last week. Promising swift action to mitigate the consequent coal shortage, the government has promised a new auctioning policy, amendments to existing agreements and a request to re-consider cancellation of 40 plus blocks that are already producing coal or about to begin production. <br /><br />Today, many were awaiting the Supreme Court hearing on coal blocks with bated breaths, hoping that the anxious market and uncertainty over coal blocks would settle down. But the quagmire that the Indian coal mining sector has exposed itself to be, cannot be resolved overnight. Following the<a href="http://businessworld.in/news/economy/coal-block-allocations-since-93-done-in-illegal-manner-sc/1498494/page-1.html"><strong> landmark judgement</strong></a> of August 25, where the apex court deemed all coal block allocations (over 200) over the last two decades illegal, the court had scheduled hearings beginning today – September 1 to decide the fate of these illegal blocks. <br /><br />Pronouncing the coal block allocations ad hoc, the Supreme Court bench headed by Chief Justice RM Lodha had observed that the re-assignment of the coal blocks required further deliberation, which began today with representations from the Attorney General Mukul Rohatogi on behalf of the Union government. His submissions included possible actions government will take if all the coal block licences are cancelled like a new auctioning policy, reworking the existing mining agreements to ensure an accountable mining process and a more equitable distribution of the revenues. Plus the apex court was also requested to reconsider the fate of 40+6 blocks which have either already started coal production or can begin production very soon. <br /><br />Sources at the Ministry of Coal say that a coal auctioning policy is already underway and could be put into place within the next three months to ensure a speedy re-distribution of the coal mines. Most stakeholders including the petitioners believe cancellation and auctioning of the blocks would be a good move to clean up the mining mess. <br /><br />The counsel for the writ petitioners Prashant Bhushan upholding the August 25 judgement detailed its possible impacts. “If all the leases were cancelled, then that would allow serious players to bid for these blocks who would then mine them efficiently considering the investment they have made in the auction. The state governments would earn huge revenue from the auction proceeds that could be then used for the socio-economic development in these states,” he says. (<a href="/en/c/document_library/get_file?uuid=aeb45860-356f-4dad-b6ae-86c70a92ee41&groupId=36166"><strong>See Note)</strong></a><br /><br />Even industry experts believe the ongoing trial will result in a clearer, transparent and comprehensive regulatory policy which could help the coal production in the long run, while the short-term consequences of the apex court judgement remain uncertain. Today’s hearing has further strengthened their belief that this is paving the way towards better allocation of natural resources. A sentiment mirrored by the stock market as well, which saw a marginal rise in the coal linked companies like Jindal Steel shares which closed the day up 6 per cent, Hindalco 4 per cent and Sesa Sterlite about 2 per cent. <br /><br />The court has asked the government and the three associations – sponge iron manufacturers association, power producers association and the miners association to submit affidavits on the matter before September 9 – the next scheduled date for hearing the matter. The affidavits are required to list the various stakeholders’ stand vis-a-vis the court’s judgment of last week, which will be taken into consideration before the court takes a final call on the future of these coal mines. <br />A few including environmentalists, fear that the promised quick action could lead to adverse impact on the environment while not recognising the gravitas of the coal scam. Greenpeace believes the government’s submission in the court is an attempt to make light of the coal scam ruling and is actually a bid to speed up coal block allocation using power shortage as a pretext. This they fear will once again result in running roughshod over environmental laws.<br /><br />“The government’s response to the court attempts to paint a picture that all is well in the coal sector and now the blocks will be quickly auctioned. The SC has already deemed all coal block allocations illegal and has made it clear that it will not tolerate any further discrepancies. The NDA government will now need to follow a transparent and legally upright auction process to access coal and this is certainly a signal that they cannot further ignore forest rights and other important environmental laws,” says Vinuta Gopal, climate and energy campaigner, Greenpeace India. She adds: “This is certainly an end to cheap coal which skewed energy planning in India towards unsustainable and dirty coal-based power at the cost of crores of public money.” <br /><br />Altogether, there are 218 blocks, of which 80 have already been cancelled. Out of the remaining, 46 may further be exempted, of which 12 ultra mega power projects have already been exempt by the apex court.<br /><br /><em>moyna@businesswold.in<br />mmatbworld@gmail.com</em><br /><br /> </div>
