At present, companies other than steel, power and coal washing services firms are barred from bidding for coal blocks. The Centre proposes to open it up to all firms with offices registered in India. “This will attract investments from Indian and global corporates, besides mining majors such as Peabody, BHP Billiton and Rio Tinto,” said a senior government official, who did not wish to be identified.
As per section 11A of the Mines and Minerals Development and Regulation (MMDR) Act, the Centre can auction coal and lignite mining licences to companies engaged in iron and steel, power and coal washing sectors.
The official said the clause can impede the endeavour to open up the sector through commercial mining. “The clause was earlier kept to ensure only serious players enter the sector, which was then restricted to only captive mining firms. We have to remove the condition mandating bidders to be already engaged in coal mining operations in India, to open up the sector in the true sense,” said the official. “Due to lack of time, we may even bring an ordinance to ensure success of auctions for commercial mining.”
ET had reported on December 26 that the government was planning to open up the Indian coal sector with a large offering of more than 200 blocks for commercial coal mining in the next five years. The blocks are expected to produce at least 400 million tonnes of coal at peak capacity.
The first tranche of coal auctions for commercial sale is likely to begin this financial year, with about 40 blocks with peak mining capacity in the range of one million tonnes to 50 million tonnes per annum, to cater to needs of all coal consumers. The coal ministry is expected to issue bidding rules for commercial mine auctions and hold stakeholder consultations this month.
The government hopes to stop coal imports by power plants by 2024.
The coal ministry has said it will auction blocks for commercial mining on revenue-sharing basis and it proposes to announce incentives for quick production from mines.
The government will not regulate prices, marketing or sale of coal from mines, but minimum production from the commercial coal mines will be specified, and bank guarantees are planned to be linked to it to prevent hoarding and creation of artificial scarcity.
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January 02, 2020 at 08:34AM
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Coal mining may be opened up to all sectors before next auction - Economic Times
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