GODAVARIKHANI, Andhra Pradesh, India: In this photograph taken recently, Indian coal miners carry baskets of coal inside an underground tunnel of a mine owned by the Sinagareni Collieries Company Limited (SCCL) at Godavarikhani, some 250 kilometers east o NEW DELHI, Sept 24 (AFP): India's top court cancelled more than 200 government permits for coal mines and handed down fines worth hundreds of millions of dollars to some companies Wednesday after the licensing process was deemed illegal.
The ruling triggered a sharp slide on the stock market, deepening the crisis in the mining sector which has been in turmoil since the government-run procedure for awarding the coal blocks between 1993 and 2009 had been declared illegal.
After the Supreme Court's momentous ruling last month, the coal industry had been fearing the worst from Wednesday's hearing.
In the end, only four out of the 218 contracts -- which were mainly handed out by the previous left-leaning Congress government -- were allowed to stand.
The court cancelled 168 of the other 214 allocations with immediate effect and gave the other 46 six months' grace to continue operating.
"All the coal blocks must be cancelled, there is no reason to save them as they are illegal," said Chief Justice R.M. Lodha said in the ruling.
"Breathing time needs to be given to 46 allottees, who have been give respite till 31st March, 2015," he added. All of these are functional blocks where mining activity has been underway.
Four other coal fields which were initially declared illegal have also been spared because of their massive power generation capacity, the court said.
Two of them are government-run ultra megapower projects in the central Indian state of Madhya Pradesh and the remaining belong to the state-owned National Thermal Power Corporation (NTPC)and Steel Authority of India (SAIL).
As part of the ruling, the firms who have been allowed to continue operating the 46 mines will have to pay a fine of 295 rupees ($4.80) for every tonne of coal extracted. The companies with the four ongoing contracts are exempt.
India's NDTV news network reported that the total could amount to between 80 billion to 100 billion rupees ($1.32-1.64 billion).
The Bombay Stock Exchange's key benchmark index plunged nearly 176 points immediately after the court verdict although it did recover some of its losses towards the end of trading.
While the ruling could have dramatic consequences in a country with a long history of power cuts, it was welcomed by the right-wing government which took power in May's elections.
The new government, which savaged the Congress-led administration over its record of corruption, has promised to initiate a fresh round of speedy "transparent" auctions to deal with a looming power crisis in the country.
"Central government welcomes this judgment and we are comfortable with the verdict given by the Supreme Court," Attorney General Mukul Rohtagi told reporters outside court.
Law Minister Ravi Shankar Prasad also praised the court's ruling.
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