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The Supreme Court verdict has also cast a cloud on already stressed bank cred- it to the steel and power sector since their projected risk will become unviable if coal assets were taken away. According to the Reserve Bank of India (RBI), gross bank credit to power and steel industries as on June 2014 stood at $84 billion and $44 bil- lion, respectively. The level of stress on bank credit to these sectors was evident from the fact that 52 loan accounts of companies in steel sector and 16 loan accounts in power sector had to be restructured by the bank in June 2014 to prevent these loan portfo- lios from becoming non-performing assets (NPAs) on the books of the lenders. In late October, the government start- e d i n i t i a t i n g l e g i s l a t i v e c h a n g e s t h a t would enable it to put all the blocks up for fresh allocation through electronic auctions. As the first step, the govern- ment initiated laws to acquire back all land bought by companies whose coal blocks are canceled by the court. The new law was imperative for the government to plug the loophole since the Supreme Court order of September 24 de- clared that all 214 coal blocks allotted to various companies and investors since 1993 were illegal and had to be taken back by the government. But the same order did not mention any- thing about the land above the coal reserves, which companies had bought from various private owners to implement mining pro- jects. In absence of the title for such land vested with the government, the latter would not be able to hold fresh auction of the 214 coal blocks as directed by the courts. However, not all felt the auction was the panacea for all that ailed the industry. "Auction would change the concept of allocation of scarce resources followed so far and competitive bidding through auc- tion would lead to wastage of valuable resource and discourage risk capital in minerals," said R. K. Sharma, secretary general, Federation of Indian Mineral Industries (FIMI). Others have been guarded in their reaction to fresh auction of the blocks. "Fresh auction is an important decision and highlights the government's serious- ness in reforming the coal sector. But it is also necessary that the route followed must provide a level playing field between both government and private sectors in terms of terms and pricing," said Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry (FICCI). The trade unions operating in the coal sector were already up in arms against the government. "Fresh auctions was a back- door entry for taking over the entire coal sector by private companies," said Gurudas Dasgupta, general secretary, All India Trade Union Congress (AITUC). "There are enabling clauses in the laws introduced by the government, which gives rise to apprehensions of sweeping privati- zation of national resources. This is not in national interest and it could jeopardize CIL," he added. The Production Gridlock "Coal production over the last four years has hardly been growing at 1%-1.5%. For last year, I see production going up by 6%. I have an ambitious target of nearly 1 bil- lion mt over the next four years," said Coal Minister Goyal. Ambitious or bravado? The jury is still out. Nonetheless, past performance of the Indian coal industry definitely remains an indication of the future. Since the prob- lems of the industry stretches far beyond mere allocations and auctions, which were issues engaging the government the most. i n d i a n c o a l m i n i n g c o n t i n u e d 50 www.coalage.com November 2014 The Indian Story So Far — A Messy Affair • June 1993: Coal Mines Nationalization Amendment Act passed to permit captive coal mining. • 1993-2009: Federal government allocates 214 coal blocks to private and government compa- nies for captive use. • August 17, 2012: National auditors, comptroller and auditor general (CAG) declare that govern- ment gave undue gains to companies by not auctioning 57 coal blocks allocated between 2006-2011. • August 27, 2012: Prime minister declared in Parliament that CAG's assessment of a $33 bil- lion loss to exchequer due not no adopting auc- tion process was not justified. • September 2012: Federal investigators, Central Bureau of Investigations (CBI) commences questioning and investigations into alleged coal scam conducting raids and filing police complaints. • June 2013: Official criminal complaint lodged against Naveen Jindal, chairman, Jindal Steel and Power Ltd. and former coal minister, Dasari Narayan Rao. • October 2013: Criminal complaint lodged against Kumar Mangalam Birla, leading Indian industrialist and former secretary to Coal Ministry, P.C. Parikh. • August 2014: Supreme Court rules allocations made between 1993-2010 as illegal. • September 2014: Supreme Court cancels all 214 block allocations and directs Coal India Ltd. to take over the mines. • October 2014: Government announces new laws to result issues relating to Supreme Court order. Truck-shovel mining is prominent in India, with mainly hydraulic excavators and 100- to 190-ton class haul trucks.