Govt to reduce entry barrier in coal mining

coal mining

   Mr Anil Kumar Jain, Secretary, Ministry of Coal, Govt of India, said that the government is looking at reducing the entry barriers in coal mining which will have a spin effect on the GDP growth and the economy. He further added that the Ministry is open to all suggestions in this regard and will go to the Cabinet after the consultation series are over.
   Mr Jain was speaking at a Stakeholder Consultation on recently launched Discussion Paper of Ministry of Coal for ‘Auction of Coal Mines for Sale of Coal’ organized by Ministry of Coal, Govt of India, jointly with FICCI.
   This was the first of the series of stakeholders’ consultations being organized to gain the industry’s perspective on the upcoming auction of coal mines for sale of coal.
   Mr Vinod Kumar Tiwari, Additional Secretary, Ministry of Coal emphasized that the objective of the Stakeholders’ consultation is to mitigate the concerns of industry and enhance the participation in the auction.
   Highlighting that there is no true assessment of future coal demand in the country, he stressed on the need to reduce the burden on coal imports. He also highlighted Government’s efforts to ensure maximum participation in the upcoming auctions by reducing the upfront payment amount to 0.5 percent, extending the Prospecting Leases (PL) cum Mining Leases (ML) contracts and minimum 4% revenue share as the floor price for the commercial coal mining auction process.
   Mr Dilip Chenoy, Secretary General, FICCI appreciated the Ministry’s openness to receive suggestions on commercial coal mining.
   Government had promulgated Mineral Laws (Amendment) Ordinance, 2020 on January 10, 2020 to enable wider participation in auction of coal mines by removing the end-use restrictions of the mining blocks. Earlier last year, Government had also allowed 100% Foreign Direct Investment under automatic route for coal mining activities including associated processing infrastructure.
   To take this forward, Government is in the process of formulating guidelines for commercial mining of coal blocks. Subsequently, Ministry of Coal has come out with a Discussion Paper entailing key terms and conditions of the auction process.

To ensure maximum participation in auctions:

  • Govt has reduced upfront payment amount to 0.5 percent
  • Extended the Prospecting Leases (PL) cum Mining Leases (ML) contracts and
  • Minimum 4% revenue share as the floor price for the commercial coal mining auction process
  • Govt has also allowed 100% Foreign Direct Investment under automatic route for coal mining activities including associated processing infrastructure
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