KOLKATA (miningweekly.com) –  The Indian government is scurrying to come up with options to place before the Supreme Court at its next hearing on September 1, when the fate of 213 coal blocks declared illegally allocated will be decided.

The government was hoping that the apex court would not order a blanket cancellation of the allocated coal blocks following its August 25 verdict declaring the allocation process between 1993 and 2010 illegal.

In 2012, the Supreme Court had ordered the cancellation of 122 telecom licences issued to mobile phone operators, following a similar ruling declaring allocation of 2G spectrum as illegal, which prompted several domestic and international mobile operators to down shutters and scrap investments.

Officials in the Coal Ministry are keeping their fingers crossed that the Supreme Court will agree to treat each arbitrary and illegal allocation on a case-by-case basis instead of a blanket cancellation and that it will consider various milestones achieved in developing the mines and critical investments made in linked projects, such as thermal power plants.

One of the options that the government may put before the court is to place all the illegally allocated blocks under the government-owned and -managed Coal India Limited (CIL).

The Centre for Indian Trade Unions (CITU), the labour arm of the Communist Party of India, has demanded that all the blocks declared illegal by the courts should be vested with CIL.

“The government should ensure the return of all coal blocks to CIL for further development, mining and production while also taking steps to bring those responsible for the coal scam to book,” said CITU general secretary Tapan Sen.

The second option under consideration is to seek a court directive to put 31 of the 213 coal blocks which have been operationalised under a court-approved government special purpose vehicle until such time as the policies and guidelines for auction of natural resources are fine-tuned and put into play by the government.

Coal Ministry officials engaged in preparing for the next court hearing said that a separate entity for the 31 operational coal blocks would ensure continued production from the mines, including captive mines linked to operational thermal power plants, and maintain fuel supply and economic viability of the latter projects.

The federal government is also expected to seek the court’s view on its ruling putting Singareni Collieries Company Limited’s (SCCL’s) status into question.

In its August 25 ruling, the apex court said the provincial governments, or companies controlled by them, could not undertake commercial mining activities under prevalent federal laws pertaining to the sector.

However, SCCL – the country’s second-largest coal producer with coal production of 50-million tons a year – has been a miner since 1886 and has been majority owned tby he provincial governments. The government of Andhra Pradesh has held an equity stake of 51% in SCCL. The stake was subsequently transferred to the government of the newly created province of Telengana.

Though the court had not specifically mentioned SCCL in its verdict, the latter’s status had been put in doubt as a provincial government-run miner which as per the new ruling could not undertake commercial mining operations.