Union government opens up commercial coal mining for private sector, will enhance efficiency says coal minister
New Delhi, Feb 21 (IBNS): The Union government has opened up commercial coal mining for the private sector following the approval given to this coal sector reform by the Cabinet Committee on Economic Affairs, according to media reports.
On Tuesday, the Committee, chaired by Prime Minister Narendra Modi, approved the methodology for auction of coal mines / blocks for sale of coal under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957.
The opening up of commercial coal mining for private sector is the most ambitious coal sector reform since the nationalisation of this sector in 1973, the government said in a release.
Union minister for Coal and Railways, Piyush Goyal, said, "Government opens up commercial coal mining to private sector which will bring efficiency and competition in coal production, attract investments and best-in-class technology, and help create more jobs in the coal sector."
By an order on September 24, 2014, the Supreme Court of India had cancelled 204 coal mines/blocks allocated to the various government and private Companies since 1993 under the provisions of Coal Mines (Nationalisation) Act, 1973.
Meanwhile, the Coal Mines (Special Provisions) Bill 2015 -- to bring transparency and accountability according to the Union government -- was passed by the Parliament.
It was notified as an Act on March 30, 2015.
Enabling provisions have been made in the Coal Mines (Special Provisions) Act, 2015 for allocation of coal mines by way of auction and allotment for the sale of coal, the government said.
The Union government, in its release said that the methodology gives highest priority to transparency, ease of doing business and ensures that natural resources are used for national development.
It said, the auction will be an ascending forward auction whereby the bid parameter will be the price offer in Rs./tonne which will be paid to the state government on the actual production of coal. There shall be no restriction on the sale and/or utilization of coal from the coal mine.
The Central government expects the reform to bring efficiency into the coal sector by moving from an era of monopoly to competition.
According to the Central government, it also lead to energy security as 70 per cent of India’s electricity is generated from thermal power plants. This reform will ensure assured coal supply, accountable allocation of coal and affordable coal leading to affordable power prices for consumers, the release said.
According to Minister Goyal, the measures "will enhance competition in the system, bring efficiency in coal production, reduce coal import, save foreign exchange, and generate job opportunities for the people."
Coal India Chairman Gopal Singh, in recent media interviews said that his organisation welcomes competition in the sector but competition depends on when the government decides to go for the auctions.
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