Centre may permit sale of 50 per cent coal from captive blocks

"In the note for consultation of Ministry of Mines, it is proposed to incorporate a provision in the Act to allow sale of 50 per cent of coal/lignite produced by captive mines on an annual basis," the Coal Ministry said

New Delhi: The Centre plans to permit sale of 50 per cent of coal/lignite produced by captive blocks, a move aimed at augmenting the production and increasing the availability of dry fuel. The government plans to do so through incorporation of a provision in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR).

“In the note for consultation of Ministry of Mines, it is proposed to incorporate a provision in the Act to allow sale of 50 per cent of coal/lignite produced by captive mines on an annual basis. Further, an additional amount will be charged on the merchant sales of coal/lignite by the captive miners,” the coal ministry said in brief note.

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The ministry said that it has invited comments from the state governments of coal-bearing states and stakeholders/general public on the said proposals. The Ministry of Mines has also invited comments of the state governments, among others, on the proposals for additional amendments being considered in the MMDR Act.

“The ministry of mines has also sought comments of Ministry of Coal on the said draft proposal. Some of the said draft proposals are applicable in the case of coal/lignite also. Before sending the final comments/response to the Ministry of Mines, it is considered appropriate to seek comments of state governments of coal bearing states…on issues relating to coal/lignite,” the coal ministry said.

In India, the import of coal is increasing on year on year basis. In 2015-16, the country imported 203.95 million tonnes (MT) of coal which was increased to 248.54 MT in 2019-20 and consequent spending of around 1.58 lakh crore in foreign exchange.

Allowing sale of coal from captive mines will help in increase in production of fossil-fuel from captive mines and increase availability of dry fuel in the market, leading to reduction in import of coal. It is further proposed to specify the additional amount payable on such sale in the Act itself instead of leaving it to be specified under the rules framed under the Act in the same manner as will be specified for the other minerals.