Govt announces reforms in Coal and Mining sector : 500 mining blocks to be auctioned, distinction between captive and non-captive mines to be removed

By admin Last updated May 16, 2020

New Delhi: As part of government’s mega Rs.20 lakh crore Economic Stimulus package, Finance Minister Nirmala Sitharaman on Saturday announced the fourth tranche of relief and structural reform measures in 8 key industrial sectors. The 8 sectors are Coal, mining, Defence production, Airspace management, MROs, Power distribution companies, Space sectors, Atomic energy.

Coal Sector

With a view to reduce Coal import and increase India’s self reliance on coal production, the government has decided to promote private sector participation in the coal sector through revenue sharing mechanism instead of fixed price regime.
Earlier, only captive consumers with end-use ownership could bid. Now any party can bid a coal block and sell in the open. The government will also liberalize entry norms and nearly 50 blocks to be offered immediately.
On the other hand Coal gasification and liquefaction will be incentivized through rebate in revenue share. The government also proposed investment of Rs.50,000 crore for infrastructure development in coal sector.
The investment of Rs. 50,000 crores is for the evacuation of enhanced CIL’s (Coal India Limited) target of 1 billion tons of coal production by 2023-24 plus coal production from private blocks, the finance minister said.

Mining :

With a view to enhancing private investments in the Mining Sector, the finance minister has announced several reform measures in the mining sector.

Introduction of a seamless composite exploration-cum-mining-cum-production regime.
500 mining blocks would be offered through an open and transparent auction process.
Govt to introduce joint auction of Bauxite and Coal mineral blocks to enhance Aluminium Industry’s competitiveness. Will help aluminum industry reduce electricity costs.
Remove the distinction between captive and non-captive mines to allow the transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production.
Ministry of Mining is in the process of developing a Mineral Index for different Minerals.
Rationalisation of stamp duty payable at the time of award of mining leases.