However, Schedule II and III coal mines were reserved for companies engaged in specified end-use and therefore a large number of mines could not be used for commercial sales. The policy on captive use of coal blocks has had some major drawbacks. For one, it did not result in optimal utilisation of an important natural resource of the country given that the use was dependent on the industry for which a coal block was allotted.
If such industry did not do well because of market forces or other factors, the coal production suffered. For example, steel can be cyclical and if there was a downturn in the steel industry, there was a resultant impact on captive coal blocks which could not be used for an industry that was operating at better capacity, leading to an increase in the import of coal by industries.
Cleaner coal is also the need of the hour and is an area where India continues to lag. Prior to this, the GoI had also issued the methodology to fix the floor or reserve price for auction of coal mines in The auction of the coal mines was sought to be based on prescribed bidding parameters.
In line with the Order, the foreign direct investment FDI policy was also amended to reflect the policy change in the coal sector. It was further subject to the condition that processing units would not mine or sell coal in open markets. The Amendment allows for grant of a composite prospecting licence-cum-mining lease in respect of coal blocks. This is expected to allow mining of unexplored or partially explored blocks and increase the inventory of coal blocks in India.
The Amendment removes the restriction of prior engagement in coal mining operations in India as an eligibility criterion for grant of mining lease and other related licenses Mining Concessions.
The Amendment allows all companies, irrespective of their prior experience in coal mining operations in India to be selected for grant of the Mining Concessions through auction by competitive bidding.
Any company which proposes to carry on coal reconnaissance, prospecting or mining operations, for own consumption, sale or for any other purpose is now permitted to get the Mining Concessions. This move is likely to see foreign companies which do not have prior experience in coal mining in India participate in the competitive bidding.
Consistent with the Order, the Amendment removes this restriction to permit companies which are not 'engaged in specified end-use' to participate in auctions for these coal mines, effectively allowing these mines to be used for commercial mining.
Prior allottees are the coal allottees of Schedule I mines whose allotments were cancelled pursuant to the Supreme Court Judgement. The Amendment puts an allottee whose allocation has been terminated under CMSPA at the same footing as that of a 'prior allottee' and permits such allottee to participate in the immediate next auction provided that it meets all the prescribed criteria applicable to a 'prior allottee' under the CMSPA.
A state government cannot grant Mining Concessions for coal mines except with the previous approval of the GoI.
The Amendment allows for an exception to this and permits the state government to grant the Mining Concessions for coal without the previous approval of the GoI if i the GoI has issued an allocation order; ii the area has been reserved by an order of the GoI or the state government; or iii a vesting order or an allotment order has been issued by the GoI under the CMSPA.
This could substantially cut down on the time required for new lessees to obtain the necessary approvals, licences and clearances in order to start their mining operations and in turn, facilitate sustained production of coal. The Amendment is significant as it seems to be the culmination of years of efforts of the GoI to de-nationalise the coal mining sector and make the sector more attractive for private capital.
The sector has lagged behind considerably and the reforms under the Amendment will hopefully give it the much need shot in the arm attracting not just local private participation but also foreign investment. The Supreme Court Judgment was a turning point in the coal mining sector and the clear directive of the Supreme Court was to ensure sufficient transparency and fairness.
Along with the Singareni Collieries Company Ltd. SCCL which was already in operation since and which became a Government company under the control of Government of Andhra Pradesh in , India thus had two Government coal companies in the fifties. Right from its genesis, the commercial coal mining in modern times in India has been dictated by the needs of the domestic consumption.
On account of the growing needs of the steel industry, a thrust had to be given on systematic exploitation of coking coal reserves in Jharia Coalfield. Demand was high and, in early , freezing weather intensified the coal shortage, producing a serious energy crisis. The government was forced to ration coal and many households were left without heating. Exports were temporarily suspended and, for the first time, the government considered importing coal. To protect the country from future crisis, the government attempted to increase capacity and production in the industry.
This proved difficult as the shortage of manpower persisted. As the established deep-level mines were unable to meet demand, the government invested in opencast mining during the s - a policy previously regarded as impractical. The NCB was given increased borrowing powers for the purpose of investment. This act offers great possibilities of social advance for the workers, and indeed the whole nation. If all alike-workers, National Coal Board and Government-shoulder their duties resolutely and use their rights wisely, these great advances will be assured.
I send my wishes to all engaged in this vital work. This website uses cookies We place some essential cookies on your device to make this website work.
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