KOLKATA (miningweekly.com) – Nudged by the federal government, India’s provinces have started to relax rules and regulations to kick-start early operations at the coal blocks auctioned earlier this year.

The relaxation of provincial level rules and regulations follows a missive from the federal Coal Ministry to all coal-bearing provinces, that they should make the necessary amendments to ensure auctioned coal blocks get into production by March 31, 2016.

The Indian government earlier this year successfully auctioned 34 coal blocks. Of these, 16 were operational coal mines and licences of erstwhile owners which had been cancelled and blocks allocated to new miners under the mandatory auction rules.

But, owing to the plethora of rules and regulations at the local level, only seven of the operational mines have been able to get back into production, prompting the Coal Ministry to push the provincial governments, a Ministry official said.

At the federal level, the Forest and Environment Ministry has clarified that the new coal block owners could start mining operations immediately on nonforested areas of the land even as they await formal forest clearances from the Ministry.

The governments of all coal-bearing provinces have made amendments to relevant local laws under which land of coal blocks would be transferred to the new owners at old prices and without going through the protracted process of revaluation of the land to arrive at a new price payable by the new miner, the official said.

In the central Indian province of Chhattisgarh, the government previously stipulated that miners would need to pay 15% of the value of land by way of registration of transferred land and 10% for the grant of a mining lease. This had now been reduced to 10% and 5% respectively.

However, some officials in the Coal Ministry conceded that it was not only procedural delays that were dogging operations of auctioned coal blocks. Rather the auction process had not been “thought through from the stage of conducting the auctions right up to the stage where the process reached the provincial level”.

For example, it was cited that several of the new miners who had bagged the blocks at the auctions were yet to be handed mining plans and reports lying with erstwhile owners and it was incumbent on the provincial government to act as bridge in such a process.

Another grey area facing the new miners was that the latter were liable to pay fines for delays in operationalisation of the coal blocks but it was unclear whether such liability included delays stemming from the provincial government, the official added.