New Delhi: In an attempt to attract investments in coal mining, the Union Cabinet on Wednesday approved the promulgation of Mineral Laws (Amendment) Ordinance 2020.
The ordinance allows coal mining for any company present in sectors other than steel and power, and dispenses away with the captive end-use criteria. While the move will help create an efficient energy market, usher in competition and reduce coal imports, it may also put an end to state-run Coal India Ltd’s (CIL’s) monopoly. India’s coal sector was nationalised in 1973.
Despite having the world’s fourth largest coal reserve, India imported 235 million tonnes (mt) of coal last year, of which 135 mt valued at Rs171,000 crore could have been met from domestic reserves, coal and mines minister Pralhad Joshi told reporters.
The move will also help India gain access to high-end technology for underground mining used by global miners. New Delhi’s move comes at a time when the window for fossil fuels is rapidly closing, and the global energy landscape has been rapidly evolving, with fundamental changes to the investment culture amid growing climate concerns.
“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," a government spokesperson said in a tweet.
This comes in the backdrop of India’s gross domestic product growth decelerating to a six-and-a-half-year-low of 4.5% in the September quarter amid slowing domestic and external demand.
In 2018, the NDA government had allowed commercial mining by private entities. The Centre had set a mining target of 1.5 billion tonnes by 2020. Of this, 1 billion tonnes was to be from Coal India Ltd and 500 million tonnes from non-Coal India sources, in line with the government’s push to raise natural resources production to kickstart economic growth. This has now been revised to 1 billion tonnes of coal by 2023-24.
The Union Cabinet in August last year announced 100% foreign direct investment (FDI) under the automatic route in coal mining for open sale, besides creating associated infrastructure, such as washeries.
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January 08, 2020 at 04:56PM
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