The government’s move to relax FDI (foreign direct investment) rule in coal mining is expected to see new technology entering the sector in the coming years, Coal Minister Prahlad Joshi said.
The government’s move to relax FDI (foreign direct investment) rule in coal mining is expected to see new technology entering the sector in the coming years, Coal Minister Prahlad Joshi said. The opening up coal mining is one of the biggest reforms and the government already has some mines ready to offer but the details are with the senior officials and the PMO, Prahlad Joshi also told CNBC TV18 in an interview. India may need 1,000 mt of coal from captive and non-captive mines over the next two to three years, he added. The cabinet on Wednesday approved 100 per cent FDI under the automatic route in mining, processing and sale of coal.
The latest move by the government may also help to reduce the shortage of coal which has impacted the power sector and also boost the economic growth through new investments, the experts said. The government has already allowed the private operators to commercially mine coal. “There is a little slowing down of FDI worldwide so we have taken some significant decisions; 100% FDI for coal mining and all related processing activities will be allowed under the automatic route,” commerce and railways minister Piyush Goyal said on Wednesday. The existing rules allow for 100 per cent FDI in coal and lignite mining for captive consumption by power projects.
Meanwhile, taking stock of the matter, Anil Agarwal of Vedanta told CNBC TV18 that India should open up coal blocks of around 100-200 mt. The mines with 100-300 mt output capacity are expected to attract commercial interest, he added. He also said that allowing 100 per cent FDI in the coal mining will lead to lower pricing in electricity. India may now have many ‘Coal Indias’ as commercial mining in the coal sector opens up, he also said.