End Of Coal Nationalisation And Coal India Monopoly: Ordinance Approved To Open Up Mining Sector To Attract Global Bidders

End Of Coal Nationalisation And Coal India Monopoly: Ordinance Approved To Open Up Mining Sector To Attract Global BiddersCoal India (SAM PANTHAKY/AFP/GettyImages)

In a bid to open up the coal mining sector to attract global bidders for auctions, the Union Cabinet on Wednesday (8 January) approved the promulgation of Mineral Laws (Amendment) Ordinance 2020, which would boost FDI in mining and remove end user restrictions.

The Amendment will pave the way for the first phase of coal auction during the current fiscal and will will help private companies do commercial mining of coal other than those in steel and power sectors.

The Ordinance, which will amend the Mines and Minerals (Development and Regulation ) Act, 1957, and Coal Mines (Special Provisions) Act, 2015, would do away with the requirement of previous approval in cases where allocation of blocks was made by the Centre.

The move is likely to usher in competition and reduce coal imports and may also end the monopoly of state-run Coal India Ltd (CIL).

According to the government, the move would speed up the process of implementation of projects, ease of doing business, simplification of procedure and benefit all the parties in areas where minerals are located. Coal and Mines minister Prahlad Joshi said that this will improve ease of doing business.

The ordinance allows any India-registered company to bid and develop coal blocks. Section 11A of the Mines and Minerals (Development and Regulation) Act provides that the central government can auction coal and lignite mining licences only to companies engaged in iron and steel, power and coal washing sectors. The companies also needed prior experience of mining in India to bid for the blocks.

(With inputs from IANS)