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Govt opens up coal mining sector; Coal India's monopoly to end

Coal mining sector: The move is likely to create an efficient energy market and bring in more competition as well as reduce coal imports

twitter-logo BusinessToday.In   New Delhi     Last Updated: January 8, 2020  | 18:28 IST
Govt opens up coal mining sector; Coal India's monopoly to end
Coal mining sector: The move is likely to create an efficient energy market

Government has approved an ordinance that opens up the sector to players outside steel and power as well as removes end-use restrictions. The Union Cabinet has approved the promulgation of Mineral Laws (Amendment) Ordinance 2020 that will amend the Mines and Minerals (Development and Regulation) Act 1957 and Coal Mines (Special Provisions) Act 2015.

The move is likely to create an efficient energy market and bring in more competition as well as reduce coal imports. However, the move might put an end to Coal India Ltd's monopoly in the sector. The move would also help India gain access to high-end technology for underground mining used by miners across the globe, reported Livemint.

In 2018, the government allowed commercial mining by private entities and set a mining target of 1.5 billion tonnes by 2020. Out of this, 1 billion tonnes was set to be from Coal India, while 500 million tonnes was to be from non-Coal India entities. This target has now been revised to 1 billion tonnes by 223-24.

During the press briefing, Union Minister of Parliamentary Affairs, Coal and Mines Prahlad Joshi said that after the Supreme Court cancelled around 200 coal blocks, only 29 were auctioned due to end-user restrictions. The amendments would remove these restrictions and improve the ease of doing business. He added that the move will help private companies mine coal for commercial purposes.

He also said that India imported 235 million tonnes (mt) of coal last year, of which 135 mt valued at Rs 171,000 crore could have been met from domestic reserves.

Oil Minister Dharmendra Pradhan said that the ordinance was a major reform in the sector and that it would increase revenue of states like Odisha.

KS Dhatwalia, principle spokesperson in PIB said, "Under the ordinance, allocation of coal/lignite blocks for composite prospecting licence cum mining lease has been provided; requirement of previous approval in cases where allocation of blocks was made by Central Govt has been dispensed with. 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."

Sajjan Jindal of JSW said that the move would go a long way in reducing coal imports that is pegged at $15 billion a 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 said.

Also read: Discoms' pending dues to power generation firms increase 45% to Rs 81,085 crore in Nov

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