Government steps closer towards private coal mining

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New Delhi | Published: April 1, 2017 6:23:31 AM

The coal ministry has released a discussion paper on commercial coal mining in the private sector.

Experienced coal miners, with net worth of more than `1,500 crore, would be eligible to participate in the auctions. (Reuters)

The coal ministry has released a discussion paper on commercial coal mining in the private sector. It proposes to offer certain mines to public and private companies through auction. The mines would not have any restrictions on end use. Two to three large mines, with peak capacity of around 30 MT per annum, are planned to be put up for auction. An enabling provision has already been provided in the relevant Act for this purpose. It was also proposed that commercial miners should have full flexibility to decide its pricing and selling strategy. The mines earmarked for commercial mining would be large enough to attract the interests of foreign players in mining, the draft consultation paper said. Experienced coal miners, with net worth of more than `1,500 crore, would be eligible to participate in the auctions.

The move, which has been on the anvil for quite some time, would help the government to reach its target of producing 1.5 billion MT of coal by 2022. It expects 1 billion MT production by the state-owned Coal India (CIL), and 500 MT by the private sector. It is also expected make coal more accessible to industries such as power, steel and cement. In February, coal secretary Susheel Kumar had said that the government has set aside four blocks for commercial mining, and it plans to auction 23 blocks for in the financial year 2018.

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Coal India, the largest miner of coal in the world, is currently accountable for about 80% of coal production in India. Singareni Collieries Company and captive coal miners produce the remaining 20%. When put into action, the policy would open the doors to global mining giants such as Glencore, BHP Billiton and Rio Tinto. The ministry has called a stakeholders’ meeting on the discussion paper on April 10.

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