Parliament passes bill to open coal sector for commercial mining
New Delhi, Mar 12: Parliament on Thursday passed a bill that will remove end-use restrictions for participating in coal mine auctions and open up the coal sector fully for commercial mining by domestic and global companies.
The Mineral laws (Amendment) Bill was passed in Rajya Sabha with 83 MPs voting in its favour and 12 against.
The Lok Sabha had passed the bill last Friday. Replying after a brief discussion on the bill, Coal Minister Pralhad Joshi said the legislation will help in bringing more FDI in the coal and mining sector, and boost the economy. The minister said the bill was important as India should be using its own natural reserves, instead of importing coal worth Rs 2.7 lakh crore.
"We have to produce coal and reduce imports," he said, adding more domestic output would lead to more electricity generation and also cut the oil import bill.
The minister also assured the MPs that the government will strengthen the state-owned Coal India Ltd (CIL). "CIL will be strengthened. I have already given it a target to produce
1 billion tonne by 2023-24...There will be no problem in CIL," Joshi said.
According to the minister, the legislation will bring a "sea change" in the sector.
Joshi said the stress should be on exploiting reserves without harming the environment.
He said India has one of the largest reserves of coal in the world and if it is not mined, it would turn into "mud".
In a statement, the coal ministry said Parliament passed "The Mineral Laws (Amendment) Bill, 2020 for amendments in Mines & Mineral (Development and Regulation) Act 1957 and The Coal Mines (Special Provisions) Act, 2015."
The Mineral Laws (Amendment) Bill, 2020, will open a new era in Indian coal and mining sector specially to promote ease of doing business, the statement said.
The Bill will transform the mining sector in the country, boosting coal production and reducing dependence on imports, the statement quoted Joshi as saying.
The amended provisions clearly provide that companies which do not possess any prior coal mining experience in India or have mining experience in other minerals or in other countries can participate in auction of coal/lignite blocks.
This will not only increase participation in coal/lignite block auctions, but also facilitate the implementation of FDI policy in the coal sector, the statement said.
Now, the companies which are not 'engaged in specified end-use' can also participate in auctions of coal mines. The removal of the end-use restriction would allow wider participation in auction of coal mines for a variety of purposes such as own consumption, sale or for any other purpose, as may be specified by the Centre.
The bill also allows prospecting licence-cum-mining lease (PL-cum-ML) for coal/lignite which increases the availability of coal and lignite blocks, and coal blocks of varying grades in a wide geographical distribution will be available for allocation, it said.
The successful bidders/allottees have now been entitled to utilise mined coal in any of its plants or plants of its subsidiary or holding company. Amendments also provide for allocation of the coal mine to the next successful bidder or allottee, subsequent to termination of its allocation along with the matters incidental to it.
A provision has also been made for appointment of designated custodian for management of the mines, apart from Schedule II mines, which have come under production and whose vesting/ allotment order has been cancelled.
With the amendments, environment and forest clearances along with other approvals and clearances shall automatically get transferred to the new owners of mineral blocks for a period of two years from the date of grant of new lease.
This will allow new owners to continue with hassle-free mining operations. During the period, they may apply for the fresh licence beyond the period of two years. The auction of lease of mines can now be started before expiry of lease period.
It will enable the state government to take advance action for auction of mineral blocks so that the new lease holder could be decided before the existing lease gets expired.
This will help in seamless production of minerals in the country. "The new provisions will also augment the exploration of the deep seated minerals and minerals of national interest by allowing Non Exclusive Reconnaissance Permit (NERP) holders to apply for composite licence or Mining Lease (PL-cum-ML).
Various repetitive and redundant provisions of MMDR Act and CMSP Act have also been omitted for ease of doing business," it said. The Bill replaces the ordinance for amendment of the MMDR Act 1957 and CMSP Act which was promulgated on January 11, 2020.
The Ordinance, which was cleared by the cabinet in January, had brought amendments to the Mines and Minerals (Development and Regulation) Act, 1957, and the Coal Mines (Special Provisions) Act, 2015.
Earlier, 12 MPs from different parties expressed their views on the bill. The House saw division of votes on the bill after Elamaram Kareem of CPI (M) pressed for it.