Provincial tussle over ownership of Singareni Collieries

KOLKATA (miningweekly.com) – The government of the southern Indian province of Andhra Pradesh has formally demanded an equity stake in Singareni Collieries Company Limited (SCCL) and even hinted at the possibility of taking legal recourse to secure an interest in the mining company.

In a communication to the federal government and various central Ministries, the Andhra Pradesh government has demanded at least part of the ownership of SCCL should be vested with it and has opposed transfer of ownership of SCCL to the government of neighbouring province of Telengana.

The genesis of the tussle for ownership of SCCL was when, in 2014, the twenty-ninth Indian province,Telengana, was carved out of Andhra Pradesh.

The undivided government of Andhra Pradesh held a 51% equity stake in SCCL while the central government held 49%, but subsequent to the creation of Telengana the entire equity stake held by Andhra Pradesh was transferred to the government of the new province.

The Andhra Pradesh government has now claimed that transfer of the entire 51% majority equity to Telengana violated the division and apportioning of assets between the two provinces under the new Act that was promulgated as precursor to creation of the new province.

In its communication to the federal government, Andhra Pradesh points out that mining operations of SCCL are ‘inter-state’ and not confined within the geographical territory demarcated to the newly formed Telengana and hence assets and liabilities of the mining company should not be entirely vested with the latter under the Andhra Pradesh  Reorganisation Act 2014.

SCCL currently operates 32 underground mines and 16 opencast mines across the coal reserves at the Godavari River Valley, spanning the southern provinces, which have an estimated reserves of 10-billion tons along a single stretch of 350 km.

In an effort to gain toehold in coal mining outside its traditional operational geography of Telengana and Andhra Pradesh, the miner last year had placed a formal request with the Coal Ministry seeking coal assets in provinces of Chhattisgarh, Madhya Pradesh and Maharashtra to ensure a pan-Indian footprint.

The miner which on average produced about 60-million tons a year of coal achieved a 2% growth in production during first quarter of 2017/18 at 14.34- million ton.