India: Commercial coal mining to be allowed


Updated Tue, 17 Mar 2015 15:09:00 GMT

In the first major step towards opening the coal mining sector, India's government will start allocating coal blocks to state governments for commercial mining. The move, which is expected to be undertaken in April 2015, will put an end to the 41-year-old monopoly over the commercial sale of coal. The coal ministry will allot non-operational mines to state governments for commercial coal mining for end use in the iron, steel, cement and allied sectors. This will bring business and revenue to coal-rich states, which have so far only received royalties from private companies mining coal for captive use. "Non-operational mines will be allotted to state governments to extract coal for commercial usage and market sale. States could then sell this coal to the utilities under their umbrella or any private company for various end uses, as specified in the ordinance," said a senior official. This is pursuant to an enabling provision on commercial mining and sale of coal in the coal ordinance (special provisions), 2014. The coal ministry will also issue guidelines for the appointment of mining development operators (MDOs) by states. The coal ordinance has inserted section 3A in the Coal Mines Nationalisation Act to enable joint ventures by central and state governments and their companies and any other company, for mining operations in India 'in any form, either for own consumption, sale or for any other purpose,' in accordance with a licence granted by the state government concerned.