'Linking revenue share to CIL price may make coal dearer'
Besides ministry officials, representatives from SBI Capital Markets, JSW Energy, Adani Enterprises, Jindal Steel & Power, Tata Steel, Hindalco Industries and GMR took part in the meeting.
Concerned over linking the revenue sharing model to notified price of the state-owned CIL, private miners fear that it may jack up fuel prices. "Some of the participants observed that linking the revenue share at 1.2 times Coal India's notified price may not be a desirable proposition," said minutes of the meeting with the stakeholders a fortnight ago.
"It was stated that CIL notified price is already on the higher side and linking the revenue share to CIL notified price may result in increasing the sale price of coal by the commercial miner, whereas the objective under commercial coal mining should be to make coal available at cheaper prices," the minutes said.
Under the notified set-up, the prices are fixed by Coal India (CIL). During the meeting, it was stated that for auction of other mineral blocks, revenue share is estimated at IBM (Indian Bureau of Mines) notified price itself and no margin is being charged over IBM notified price, according to the minutes.
The contention is CIL's notified price varies across sectors and subsidiaries. Therefore, it is required to be specified which notified price will be considered for estimating the revenue share.The government has identified four coal blocks that will be put up for auction in the current fiscal. Commercial mines are alloted without specifying the end use and allow private entities to sell the fuel to buyers across sectors such as power, cement and steel.