By Our Correspondent
BHUBANESWAR/ NEW DELHI: Ministry of Coal has taken initiatives to re-visit old laws with an aim to improve efficiency, ease of doing business and to open up coal sector which would result in improving domestic coal production and reduce imports. In the present scenario of coal sector, there has been dominance of public sector companies both in exploration and mining of coal.
Age old Mineral Concession Rule, 1960 was governing many aspects of coal mining and needed amendment in furthering the Coal Sector Reforms and also due to several legislations coming into existence such as those related to Environment and Forest conservation etc. Considering the long gestation period of coal mines due to complexity of multiple laws, restrictive rules affecting entry of potential investors in the coal sector, , the following changes have been brought into the system for freedom of operations for improving coal production and to facilitate adoption of technology.
Amendment to provide for allocation of coal blocks for composite Prospecting License-cum-Mining Lease (“PL-cum-ML”) to help in increasing the available inventory of coal/ lignite blocks for auction.Provisions for any company selected through auction/ allotment to carry on coal mining operation for own consumption, sale without possessing any prior coal mining experience in India.
FDI Policy in Coal Sector allowing 100% FDI through automatic route for sale of coal, coal mining activities including associated processing infrastructure.Provisions to remove the requirement of previous approval in cases where the allocation or reservation of coal/ lignite block is made by the Central Government.
Entitlement to an allottee to utilize mined coal in any of its plants or plants of its subsidiary or holding company.To implement it, corresponding CMSP Rules and CBA rules were also amended. Amendment in Mineral Concession Rule 1960: Salient features.
Registration of Qualified Persons for Mining Plan preparation is no longer required. Project proponent’s declaration in this regard will suffice. Empowering block allocatee to make minor changes in mining plan and reducing requirement of repeated approvals thus giving flexibility in operation.
An option is now available to Coal Block allocatee to engage an Accredited Prospecting Agency for conduct of prospecting operation and preparation of Geological Report (GR) with a view to expedite exploration, bringing technology and faster growth of coal sector.
Additional option is also made available to Project Proponent through accreditation system for Mining Plan Preparing Agency for preparation. Similarly, a peer review of Mining Plan to improve quality of mine planning and fast tracking approval system has also been introduced.
Provision for regulating grant of PL-cum-ML in light of the Mineral Laws (Amendment) Act, 2020.
Amendment in the guidelines of preparation, processing and approval of Mining Plan
With a view to remove repetition of provisions from the Mining Plan which are now covered in other statutory documents, the Mining Plan structure has been simplified.
Following introduction of other laws, such as Environment and Forest Conservation etc, many overlapping information sought in mining plan has been deleted. Simplified guidelines issued.
Processing of mining plan for approval has been simplified with an aim to reduce time in grant of approval. Power to approve Mining Plan delegated to subordinate authority in CCO with an interim arrangement for the interregnum. System of appeal introduced to bring transparency.
Process has been made compatible to online approval so as to formulate an online single window clearance system.
The Union Government has formed a 4-members empowered committees of Secretaries comprising Secretaries of Department of Economic Affairs, Legal Affairs, Coal and Petroleum and Natural Gas to deliberate on issues with regard to auction methodology and operationalisation of coal blocks allocated for commercial mining. The development comes soon after the government stated that it may launch the process of auction of coal blocks for commercial mining on June 11.
Around 50 coal blocks are likely to be auctioned for commercial mining. The empowered committee has also been mandated to revise ceiling of upfront amount for future tranches of auction in case there is substantial upward/ downward change in market conditions.
Odisha’s Coal sector, which was remain neglected for about 4 decades , will soon take a new look when the Union Coal Ministry go for open auction of Coal Blocks.
India is the world’s second largest producer of coal after China, having cumulative total coal resources of 319.020 billion tonnes (till 2018) and is dependent on coal for many of its core sectors. Odisha , which houses 79,295 Million ton of coal deposits, is the second most Coal bearing State in the Country while India is the 5th biggest coal bearing Nation in the World. In past, Odisha Government only auctioned 1 coal block-Jamkhani, which had won by Anil Agarwal’s Vedanta Limited. The Coal Ministry is auctioning as many 27 blocks.
Odisha has hiked it coal production by 23 % in last 5 years, while National Coal Production increased by 24 %. Out of the 27 Coal Blocks, 21 have been reserved for auction to all Non Regulated Sectors, such as Steel, Cement and 6 Coking Coal Mines for Iron Ore and Steel. In case of allotment, 5 Coal mines are for Power sector, 9 for sale of Coal and 1 for Iron and Steel. India’s coal production was 730.54 Million ton during 2018-19 with a growth of 7.9 %
Private players like Rungta Mines Limited, Jindal Steel and Power Ltd, JSW Steel-Energy, Essel Mining and Industries Ltd, Tatas, Sesa Goa, Vedanta Industries Ltd, Adani Group and global players like Rio Tinto, BHP Billiton, PesBody, Glencore and Vale are among those eyeing on Odisha’s Coal block, sources said.
Rating Agency, Crisil has predicted that after de-nationalisation of coal blocks, India’s import bill will be reduced largely. In fiscal 2020, India imported an estimated 180-190 million tonnes (MT) of non-coking coal costing over Rs 90,000 crore.
According to Crisil, commercial coal mining can help in reducing the annual import bill by nearly 50 per cent and India can save Rs 45,000 crore. India has one of the largest coal reserves in the world at 300 billion tonnes, yet it imports a fifth of its annual requirement. At present, two government-owned miners, Coal India and Singareni Collieries Company, produce over 90 per cent of the coal.
“Earlier, only captive consumers could commercially mine coal. However, the reforms initiative will lend a fillip to commercial coal mining because any private entity can now excavate on a revenue-sharing basis,” the Agency said. Others argued that once commercial mining picks up, independent thermal power plants and captive power plants can substitute their annual imports of 80-90 MT. However, 45-50 MT would continue to be imported by the thermal plants designed to operate only on such feedstock. He further said that incremental production from these mines will also help bridge the demand-supply gap and reduce imports over the medium term, they added.
Odisha being a foremost major mineral bearing State with deposits of coal, chromite, bauxite and iron ore has been enjoying the advantage of public sector mining by the OMC, NALCO, NTPC , MCL ,SAIL ,NINL.The people in coal bearing areas of Angul-Taclcher , Sambalpur-Jharasuguda-Sundargarh have been the worst sufferers of the environmental degradation and displacement due to coal mining and power plants and in coming day the people of these areas will experience the private mining companies for mining of coal and power generation. The other mineral bearing districts such as Jajpur, Keonjhar, Sundargarh and Mayurbhanj have been suffering in many ways and there has been no alternative sources of livelihood being developed for the locals of these area.
