Give alternate blocks to cos with mines in no-go areas: Panel

The Planning Commission has favoured the allotment of alternate coal blocks to companies that have made "substantial" investments, but whose mines have been declared "no-go" zones by the Environment Ministry.However, in order for a company to avail an alternate mining location, the panel has stipulated that the block falling in a "no-go" zone should have been awarded prior to June, 2010.The panel has also recommended that a new coal block may be allotted jointly to two or more companies if the reserves are large enough.

Sources said the mining projects of Vedanta group firm Hindustan Zinc, Aditya Birla Group firm Ultra Tech, Prakash Industries, which are said to have made over 50 per cent of the total committed investment, could benefit from the proposal.At a high-level meeting held recently by Planning Commission Member Energy B K Chaturvedi, it was also decided in case of companies which had not made a substantial investment in "no-go" blocks, they would be given preferential allocation under the forthcoming auction of coal and lignite blocks.

The Environment Ministry has declared about half of coal -bearing forest areas of nine coalfields as no mining zones or "no-go" areas, which irked the coal ministry, which says the country could see a coal shortage of 500 million tonnes in the next few years on account of such classification.

Against this backdrop, a working group of Planning Commission, which comprises top officials from the ministries of Power, Coal, Steel, Environment and Law, decided that an alternate block will only be provided to companies in case the Environment Ministry decides not to grant clearances for the mines allocated before June, 2010.

For the purpose of fresh allocation, the working group decided to classify the affected firms into two groups -- A and B -- based on the quantum of investment made in the projects.The companies which have made a "substantial investment" in their projects have been classified in category 'A', while the others have been put in group 'B'.

"The allotment (of alternative block) to the category A (companies) will be made by Ministry of Coal from the list of coal blocks available straight away for allotment," the working group decided.However, the companies covered in category B will have to participate in the upcoming auction for allocation of captive coal blocks.In case such companies do not win in the bidding process, "they will be offered the block, along with the successful bidder, on terms offered by the successful bidder," the high- powered group said.