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Govt promulgated ordinance for amendment in laws to ease coal mine auctions

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The central govt has promulgated ordinance for amendment in the Mines and Minerals (Development and Regulation) Act 1957 (MMDR act 1957) and The Coal Mines (special provisions) act, 2015 (CMSP act 2015) in order to ease new areas of growth in the coal & mining sector. The amendments in detail are as follows:Amendment in the MMDR act 1957 and CMSP act 2015:

  • Enhance ease of doing business & Democratization of coal mining sector.
  • Unexplored and partially explored coal blocks mining through prospecting license-cum-mining Lease (PL- cum-ML) will be offered.
  • Foreign Direct Investment (FDI) promotion in the coal mining sector.
  • Attracting large investment in coal mining sector.
  • Allowing of successful bidder/allottee to utilise mined coal in any of the plant of its subsidiary or holding company Attracting large investment in coal mining sector as restrictions of end use has been dropped.

Amendments made:

i.Providing allocation of coal blocks for PL-cum-ML: The sections involved in this coal blocks were Section 4(2), 5(1), 8(4), 8(8), 8(9) and 31(2)(b) of the CMSP Act and Section 11A and 13(2) of the MMDR Act.

ii.Power to centre to specify purpose of allocation: Previously there was lack of clarity in the power of central govt and on participation of company. This amendment clarifies that any company selected through auction/ allotment can carry on coal mining operation.

  • 100% FDI implementation will be allowed through automatic route for sale of coal.
  • The Sections involved are 11A of the MMDR Act and Section 4(2) and 5(1) of the CMSP Act.

iii.Flexibility in deciding the end use of Schedule II and III coal mines: The end use of Schedule II and III coal mines under the CMSP Act has been provided with flexibility through omission of sub-section (3) of Section 4 of CMSP Act. this would allow wider participation in auction of Schedule II and III coal mines.

iv.Terminating allocations under CMSP act, reallocation & compensation: The CMSP act was silent on reallocation of coal upon terminations of an allocated mine. With the amendment of Section 8 (insertion of sub section (13), (14) and (15) in CMSP Act it is now possible to allocate of the coal mine to the next successful bidder or allottee.

v.Custodian appointment: Appointment of designated custodian for management of the mines will be possible by amending the Section 18 of the CMSP Act.

vi.New Section in mines created: A new section 4B (after section 4A) has been inserted to enable the Central Govt. to prescribe conditions for ensuring sustained production by the holder of mining leases, who have acquired clearances etc.

  • The Central govt has the power to prescribe the conditions for the new lessees to commence production without prejudice to the time period of 2 years for starting the production prescribed in Section 4A.

vii.Central Government to frame rules: Making rules to implement the provision of the amended Act has been removed with the insertion of new clauses in sub-section 2 of section 13. This will enable the govt the power to frame subordinate legislation to implement the intent of the Ordinance.

viii.Future targets: The govt has targeted to produce one billion tonnes of coal by 2023-24. It also aims to produce 660 million tonnes of coal by 2019-20.

ix.Current imports: India has imported 235 million tonnes coal worth Rs 1.75 lakh crore in 2019. Out of this quantity, 100 million tonnes was non-substitutable coking coal.Click here to know more

About Ministry of coal and Mines:
Union minister- Shri Pralhad Joshi.
Headquarters- New Delhi.