Coal was Not Sold - It Is Only Used!

 One of the Union Cabinet Minister, speaking on behalf of the Government, is reported to have said that Coal was never sold from the Blocks allotted, as the coal cannot be sold under the Nationalization Policy. So there was no question of anyone benefiting from Coal Blocks allocation.  

But at the same time, he is reported to have rejected the demand for cancellation of the licenses for Coal Block allocations; as such a step would cause huge monetary loss and badly affect the country's Power Sector.

 Monetary Loss for Whom?  

If the mineral continues to remain in the Coal Blocks and is not sold when ever it is extracted, why should there be huge monetary loss by cancellation of the allocation licenses and to whom?

The Parties, who got the benefit of licenses for Coal Blocks, must have drawn huge amounts as advances from the Banks against the guarantee of the lucrative Coal Blocks. Now we know the reason for the fears of the Minister for cancellation of the licenses and who are the likely beneficiaries?

Not Sold but Used!

The Goods and Services are produced with a value addition, so that they can be sold / used / utilized to cater for the needs/services of the users/consumers.. The Coal is one such item which can be used for generation of Power, production of Steel, Cement etc. Thus the licensees for the Coal Blocks, who have the rights to mine and use the coal, get benefited even without selling Coal.

 The coal obtained from these licensed blocks, allegedly at a very low license fees, for captive consumption, will be comparatively cheaper than the coal purchased / imported from other sources. Therefore the cost of production of the end products will be comparatively much lower than the ones produced using coal at the open market prices.

The other aspect is what is the guarantee that the coal mined from these Bocks is going to be utilized for Captive Use only? The word "Captive" can disappear, as in the case of notorious " GALI -IRION ORE" Mining Lease in AP State!

Thus, Coal may not be sold, yet the Licensees of Coal Blocks, may get benefited, by the policy of allocating licenses in a non-transparent manner.    

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