NEW DELHI: The Cabinet on Wednesday changed rules to allow coal mines to be auctioned to businesses without any end-use clause, effectively opening up the highly regulated sector dominated by state-run coal companies to greater participation from private players.
The Cabinet approved the promulgation of Mineral Laws (Amendment) Ordinance 2020, which will amend the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act) and Coal Mines (Special Provisions) Act 2015 (CMSP Act). The earlier restrictions that bidders for coal mines need be either steel mills, power plants or cement factories which would use the coal mined only for their internal consumption has been scrapped.
The rule change will also allow easier clearances said, officials.“The amendment to MMDR Act will allow for seamless transfer of environment and forest clearance in operational mines...the amendment to the CMSP Act will allow bidders that do not have plants to consume the coal to bid for mines," said Pralhad Joshi, minister for coal and mines.
“The bigger reform is that the bidder should not have the essential quality of an ongoing coal mining operation in India. So, this will allow FDI to come in and it will also allow those people who are not in the coal sector but want to get into it for commercial mining," said Anil Kumar Jain, coal secretary. Of the 204 blocks cancelled, so far 99 have been allocated or an auction and only 29 have been auctioned. The auction was limited by these restrictions, he said.
The Centre now plans to offer 100 coal mines for auctioning and as many as 40 coal blocks will be put up for auction in the first round under the liberalised rules that will be opened this month, said Jain.
Meanwhile, the government on Wednesday in-principle approved strategic sale of Neelachal Ispat Nigam Ltd (NINL) by allowing six PSU shareholders to sell their stake in the steel company. The strategic buyer for NINL will be identified through a two-stage auction procedure, said an official statement.
Government approves Rs 5,559 cr fund to Northeast Gas Grid
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved around K5,560 crore as viability gap funding for the proposed North-East Natural Gas Pipeline Grid (NENGPG). This is only the second such instance where the Centre will be directly funding the creation of an oil pipeline. The 1,656-km North-East Natural Gas Pipeline Grid will connect Guwahati in Assam to major cities in the region such as Itanagar, Dimapur, Kohima, Imphal, Aizwal, Agartala, Shillong, Silchar, Gangtok, and Numaligarh.