Coal scam: Supreme Court ends hearing, reserves verdict on illegal coal blocks

The Supreme Court on Tuesday ended its hearing into whether it would cancel the award of the 218 coal blocks it had previously ruled illegal, with Chief Justice Rajendra Mal Lodha saying the court would reserve judgment to an unspecified later date.

The blocks include about 40 that are producing coal, estimated to have a capacity of about 9 per cent of the 566 million tonnes India produced last year.

The apex court in August found that the country's decades-old method of granting coal mining concessions was illegal, putting investments worth billions of dollars at risk and threatening to worsen a national coal shortage.

A decision to cancel the blocks would hit firms including Jindal Steel and Power, Hindalco Industries and Sesa Sterlite, which have spent heavily on steel and power plants based around the coal blocks.

The country is suffering from an acute shortage of coal, which fuels about three-fifths of its power needs, and has had to turn to costly imports to meet rapidly growing demand.

Attorney General Mukul Rohatgi, the government's top lawyer, told the court on Tuesday that if coal block allocations were cancelled, the government was ready to re-auction the blocks.

Rohatgi also said that if all blocks were cancelled, state giant Coal India should be allowed to take over active mines, or companies be allowed to continue production until the blocks were re-auctioned, in order to avoid supply disruptions.

More than half of the thermal power stations in the country had less than a week's supply of coal on hand as of last Thursday, the lowest since mid-2012 when 620 million people in India were cut off in one of the world's worst blackouts.