The Supreme Court (SC) in a landmark verdict on Sept. 24, 2014 has de allocated 214 coal blocks out of the 218 coal blocks allocated since 1993. The four coal blocks which are exempt from the verdict are run by the Central Government with no Joint Venture with the private sector. Out of the four blocks which are exempted, two blocks are allotted to Ultra mega power projects (UMPP) and one each to NTPC (Pakri Barwadih) and SAIL (Tasra).

Commenting on the same, ICICIdirect said, ''The SC order is prima facie negative for metals companies. The SC order is set back for companies which were planning to utilize coal blocks for captive use. Furthermore penalty payment of Rs 295/tonne from the date of commencement of block will result in notable cash outflow for the operational blocks. Even though the ruling is short to medium term negative, over a longer term horizon its charts out a more clearer path for future mining operations thus resulting in better transparency in the sector.''

''Going forward companies with healthy cash flow and robust balance sheet are in better position to tide the current challenging times and are better placed in participating proposed auction process for retaining existing / obtain new coal mine to feed end user plants,'' it added.

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