Centre Releases Framework for Compensation Settlement of Cancelled Coal Mines

The Ministry of Coal has released a framework to determine the value of assets for companies whose coal block allocations were cancelled in 2014. As per the ministry, this is aimed at resolving pending compensation cases related to the 204 coal mines cancelled following the Supreme Court’s verdict that year. 

The framework sets out the process for valuation and data submission by the affected companies.

62 Coal Mines Remain Unresolved

Out of the 204 coal mines listed under the Coal Mines (Special Provisions) Act, 2015, 62 mines have not been reallocated so far. The ministry has invited compensation claims from the previous allottees of these 62 mines. 

It has described this as the final opportunity for submission of such claims. The step is intended to close the remaining compensation-related issues that have been pending for several years.

Details of the Valuation Process

According to the framework, valuation will include only mine infrastructure, excluding land and leasehold rights. Each coal block’s asset value will be determined based on available data and supporting documents. The mines covered under this process are located in Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Telangana, and West Bengal.

Companies Involved In The Process

A number of major companies appear on the list of prior allottees eligible to submit claims. These include Ultratech Ltd, Adani Power Ltd, Jindal Steel & Power Ltd, Dalmia Cement (Bharat) Ltd, Gujarat Mineral Development Corporation, and Rashtriya Ispat Nigam Ltd. The framework outlines how their claims will be evaluated in accordance with the rules.

Data Submission Timeline

Companies have been asked to submit year-wise data from FY2013-14 to FY2016-17, including details on asset values, depreciation, revaluation, and liabilities. The submission must be made within 15 days of the notification’s release.

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Conclusion

The new framework formalises the process for determining compensation for cancelled coal blocks. It provides a structured method for assessing claims and aims to complete the long-pending settlements under the 2015 Act.

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