RTI reveals 13 of 14 operational coal mines allotted to PSUs being run by pvt contractors

Of the total 35 coal mines allotted to PSUs between 2015 and 2020, 21 have been given to mines developer and operator contractors

By Ishan Kukreti
Published: Wednesday 02 September 2020

Mines Developer and Operator (MDO) contractors are running 13 of the 14 operational coal mines allotted to various public sector undertakings (PSUs) between 2015 and 2020, a Right to Information (RTI) response accessed by Down to Earth from the Union Ministry of Coal has revealed.

An MDO contractor is a shadow for a PSU with zero mining skills. These mostly private companies undertake all mining work on its behalf. The biggest among them is Adani Enterprises Ltd, which produced 31.061 million tonnes of coal in 2019-20.

The RTI also revealed that of the total 35 coal mines allotted to PSUs during the same period, 21 have been given to MDO contractors. Only 14 of these 35 coal mines are operational. 

At least 28 coal mines across the country are being run by MDO contracts, according to the RTI response. Most of these mines belong to PSUs; a few of them were auctioned to private companies such as Hindalco Industries Ltd, Reliance Cement Company Pvt Ltd, Bharat Aluminum Co Ltd, BS Ispat Ltd and Ambuja Cements Ltd.

“There is no mention of MDOs in the Coal Mines (Special Provision) Act, 2015. Also, there is little transparency about the terms and conditions through which these private companies get control of coal mines given to PSUs,” said Alok Shukla of Chhattisgarh Bachao Andolan.

These coal mines in question were allotted to the PSUs under the Coal Mines (Special Provisions) Act, 2015. The Act came after the Supreme Court deemed illegal 204 of the 218 captive coal mines allotted between 1993 and 2011 on the grounds that the allocation procedure followed was arbitrary and no objective criterion was used to determine the selection of companies.   

The three-judge Bench comprising Justices RM Lodha, Madan B Lokur and Kurian Joseph, had said in its 2014 order the state PSUs were allowed to form joint ventures on the 51:49 shareholding formula with private companies.

In the joint venture agreements, however, mining operations had been given solely to private companies, the top court had noted.

The order had stated:

This modus operandi has virtually defeated the legislative policy in the CMN Act {Coal Mines (Nationalisation) Act, 1973} and winning and mining of coal mines has resultantly gone in the hands of private companies for commercial use.

Between 2015 and 2020, as many as 33 mines went to private players and 49 to PSUs, according to data from another RTI application filed by Down To Earth earlier. Of these, only 13 private and 14 public sector mines are operating currently. This means that 55 (around 67 per cent) of the mines auctioned are not operational.

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