Govt Notifies Rules For 50 Per Cent Sale Of Coal From Captive Mines To Increase Availability Of Fuel In Power Plants

The Central government has allowed the coal mines that produce coal solely for their own use, known as "captive mines", to sell 50 per cent of their annual output in the open market, the Ministry of Coal announced on Tuesday (5 October).

In a statement, the Coal Ministry said that it has "amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite, on payment of additional amount, by the lessee of a captive mine, up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine".

With this amendment, the government has paved the way for releasing of additional coal int the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised owing to limited production of coal for meeting their captive needs, the ministry added.

The government's move comes as the coal-fired utilities in India face a fuel shortage with inventories falling to multi-year lows, reports Livemint.

"Availability of additional coal will ease pressure on power plants and will also aid in import-substitution of coal," the ministry said.

Earlier this year, the Mines and Minerals (Development and Regulation) Amendment Act had been amended to this effect. This is applicable for both the private and public sector captive mines.

Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold shall boost the revenue of the state governments, the ministry noted.

The ministry said that the move is likely to benefit over 100 captive coal and lignite blocks with over 500 million tonper annum peak rated capacity as well as all coal and lignite bearing states.

The Centre has also made provisions for grant of mining lease to a Government company or corporation for coal or lignite for a period of fifty years.

"Grant of mining leases for a period of fifty years shall boost seamless continuous production of coal or lignite by the Government companies or corporations contributing to the coal/lignite security of the nation," the ministry said.

"The said period of fifty years can be extended by period of twenty years at a time upon anapplication made to the state government. Therefore, enlargement of period of mining leases shall reduce multiplicity of applications for extensions, thereby ensuring continuity in mining operations," the Coal Ministry added.