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Recently the Indian Government initiated the process of commercial coal mining in India. Highlight the basic contours of the commercial coal mining regime and its advantages.
Recently the Indian Government initiated the process of commercial coal mining in India. Highlight the basic contours of the commercial coal mining regime and its advantages.
- Mineral Laws (Amendment) Act, 2020 was enacted for amendments in Mines & Mineral (Development and Regulation) Act 1957 and the Coal Mines (Special Provisions) Act, 2015 to end the captive coal regime and clearing the path for commercial coal mining.
About New commercial coal mining regime:
- Commercial mining allows the private sector to mine coal commercially without placing any end-use restrictions. The private firms have the option of either gasification of the coal or exporting it. They can also use it in their own end-use plants or sell them in the markets.
Key features of new regime:
- No previous mining experience is required for participating in bidding.
- 100% foreign direct investment (FDI) through automatic rule is allowed for coal mining.
- The revenue sharing will be on an ad valorem (the value of the transaction) basis and not on the basis of a fixed amount.
- The present bidding terms also allow other minerals to be extracted from these blocks.
- The Ministry of coal will help the private sector in getting statutory approvals like environment and other approvals. Benefits from commercial coal mining
Advantages of Commercial Coal Mining:
- Coal sector Modernization: in terms of mechanization, automation, mining practices, etc. Thus, the new regime will spur improvements across the industry.
- Productivity Enhancement: By ending the monopoly of CIL and bringing in competition. Also, earlier captive coal mining entities had no incentive to enhance their production beyond their own needs.
- Reducing Import Dependence: India meets a fifth of its annual requirement of coal through imports which costs about Rs 1 lakh crore. Commercial coal mining can cut the import bill by Rs 30,000 crore.
- Fulfilling the domestic demand: To meet its growth requirements and become self-sufficient, India needs to expand its production to 1,500 million tonnes per year.
- Revenue for the State: In captive coal mining companies were not required to pay royalty to states as mined coal was meant for their own end use. But mines auctioned under new norms will generate total revenues of around Rs 7,000 crore per annum.
Conclusion:
- The government should eradicate the hurdles in the way of effective implementation of the commercial coal mining regime to ensure India’s energy security.
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