The Indian Supreme Court has declared as illegal the allocation between 1993 and 2010 of 218 coal block to power, steel and cement companies such as Jindal Steel and Power or Hindalco and cancelled 214 of the 218 coal block licenses in September 2014. The court also levied fines on the owners of the cancelled licences, that will be transferred to state-owned mining company Coal India to be re-auctioned later. The four licences allowed to continue correspond to major state power projects.
The underpriced awards of coal block (so called "Coalgate" scandal unveiled in 2012) are estimated to have cost as much as US$33bn to the Finance Ministry. So far, only 30 of the 218 blocks have started coal production, with a capacity of about 40 Mt/year. Cancelling the allocations of coal blocks could aggravate the current coal shortage and as much as 28 GW of coal-fired power capacity may be affected by a cancellation.
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