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Govt Further Opens Up Coal Mining; Allows Non-Coal Cos To Bid, Removes End-Use Restriction

New Delhi: In a bid to draw investments and increase home coal manufacturing, the federal government on Wednesday accepted promulgation of an ordinance to open up coal mining within the nation to non-coal firms whereas eradicating restrictions on end-use of the gasoline.

The Union Cupboard headed by Prime Minister Narendra Modi additionally gave its nod for concluding public sale of iron ore and different mineral mines earlier than the expiry of their present mining lease on March 31, in order to keep away from disruption in manufacturing.

Briefing reporters, Coal and Mines Minister Prahlad Joshi mentioned the Cupboard has accepted promulgation of Mineral Legal guidelines (Modification) Ordinance 2020 to amend Mines and Minerals (Improvement and Regulation ) Act 1957 and Coal Mines (Particular Provisions) Act 2015.

The ordinance will amend the present proviso within the legislation that permits solely firms in coal mining to bid for coal mines.

Any firm assembly the minimal standards will now be allowed to bid for coal mines, the primary public sale of which underneath the liberalised guidelines will open inside this month, Coal Secretary Anil Kumar Jain mentioned.

As many as 40 coal blocks shall be put up for public sale within the new spherical, he mentioned.

The transfer will assist create an environment friendly power market, usher in competitors and cut back coal imports, whereas additionally ending the monopoly of state-owned Coal India Ltd.

India’s coal sector was nationalised in 1973.

Joshi, nonetheless, mentioned Coal India shall be “supported and strengthened” and ample blocks shall be allotted to it to satisfy the goal of manufacturing 1 billion tonnes of coal by 2023.

Of the 204 coal blocks whose allocation was cancelled by the Supreme Courtroom in 2014, solely 29 might be auctioned as a few of these mines had end-use restrictions – that means coal produced from them might be used just for the designated captive function solely and never traded available in the market.

The opening up of the mining to non-coal firms in addition to eradicating the end-use restriction will pave means for the public sale of those mines, he mentioned.

Joshi mentioned India has the world’s fourth-largest coal reserves, but it imported 235 million tonnes of coal for Rs 1.71 lakh crore final fiscal. Of those imports, about 100 million tonnes is non-substitutable as they’re tied to the facility plant or consumer factories, the remaining could be lower down, he mentioned.

He additionally mentioned lease of 334 non-captive mineral mines is expiring on March 31, 2020. Of those, 46 mines, principally in Odisha and Karnataka, are operational. Of the 46, 36 are iron ore mines.

The nation would face a shortfall of 60 million tonnes of iron ore if these mines are shut because of expiry of mining lease and the time taken in re-auctioning them, he mentioned, including the Cupboard has accepted auctioning them earlier than March 31 as additionally transferring the present forest and setting clearances to the brand new winner thereby saving 2 years wanted in regular course to get these approvals.

This, Joshi mentioned, would allow seamless switch and no manufacturing shall be misplaced.

Underneath the ordinance, allocation of coal/lignite blocks for composite prospecting license cum mining lease has been supplied; requirement of earlier approval in instances the place the allocation of blocks was made by the central authorities has been distributed with, the minister mentioned.

“This will speed up the process of implementation of projects, ease of doing business, simplification of procedure and benefit all the parties in areas where minerals are located,” he mentioned.

In 2018, the federal government had allowed business mining by personal entities however non-coal firms couldn’t take part within the public sale. In August final 12 months, the federal government introduced 100 per cent overseas direct funding (FDI) underneath the automated route in coal mining for open sale, moreover creating related infrastructure, equivalent to washeries.

The transfer to amend the legislation will assist India acquire entry to high-end know-how for underground mining utilized by world miners.

Oil and Metal Minister Dharmendra Pradhan termed the choice as “a mother reform in the coal industry”.

Commenting on the choice, Sajjan Jindal, Chairman and Managing Director JSW Group, mentioned: “Huge reform announced by the Govt on Commercial mining in Coal. This will go a long way in reducing the Coal Imports which is over USD 15 Billion/year. In today’s time when the Oil prices are very uncertain, this decision is path breaking in making India self-reliant”.

“Continuity of all Forest and Environment clearances for Iron-Ore mines for a period of 2 years is another great reform. This was a long pending reform which will make the Indian Steel industry more aggressive and competitive on a global level,” he tweeted. “I am amazed with the pace at which this government is acting on critical economic decisions. I am sure that with this speed of decision making, the economic revival will be much faster than what you and I can think.”

Welcoming the transfer, CII president Vikram Kirloskar mentioned the opening up of the coal mining sector with none end-use restriction will assist not solely harness coal reserves in India but additionally assist many main overseas gamers set up operations.

The transfer will bost each manufacturing and mining effectivity moreover substituting import of coal value Rs 30,000 crore, he mentioned.


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