Govt opens up coal mining

New Delhi, January 8

In a bid to attract investments and boost domestic coal production, the government today approved promulgation of an ordinance to open up coal mining in the country to non-coal companies while removing restrictions on end-use of the fuel.

The Union Cabinet headed by Prime Minister Narendra Modi also gave its nod for concluding auction of iron ore and other mineral mines before the expiry of their current mining lease on March 31, so as to avoid disruption in production.

The ordinance will amend the current proviso in the law that allows only companies in coal mining to bid for coal mines.

Any company meeting the minimum criteria will now be allowed to bid for coal mines, the first auction of which under the liberalised rules will open within this month, Coal Secretary Anil Kumar Jain said.

As many as 40 coal blocks will be put up for auction in the new round, he said.

The move will help create an efficient energy market, usher in competition and reduce coal imports, while also ending the monopoly of state-owned Coal India Ltd. India’s coal sector was nationalised in 1973.

Joshi, however, said Coal India will be “supported and strengthened” and adequate blocks will be allocated to it to meet the target of producing 1 billion tonnes of coal by 2023.

Of the 204 coal blocks whose allocation was cancelled by the Supreme Court in 2014, only 29 could be auctioned as some of these mines had end-use restrictions – meaning coal produced from them could be used only for the designated captive purpose only and not traded in the market. — PTI