Centre close to finalising captive coal mining policy for small scale industries

New captive coal-mining policy for small-scale industry

Published: Friday 30 June 2006

following an abysmally low gdp growth in the mining and quarrying sector in the last fiscal year (2005-2006), the Centre is now in the process of finalising a new captive coal mining policy for small-scale industries .

The last fiscal year had closed at an enviable 8.1 per cent gdp growth but the mining and quarrying sector was down to one per cent from 5.8 per cent. To overcome the situation, the Centre has been hinting at loosening up the policy on captive coal mining since January by extending the definition of eligible captive consumers. An overhauled policy in this regard is still awaited.

The proposed captive coal mining policy will allot captive coal blocks through bidding to small units. They can form groups and jointly bid for coal blocks in approved areas. In case of smaller requirements they can apply for isolated reserves on a sub-lease from Coal India Ltd. Under current regulations, only those private-sector companies that are involved in iron and steel production, power generation and cement production, can extract coal for captive use. The new policy, however, broadens the eligibility criteria and allows small-scale units involved in any of the above trade to bid for the unallocated coal blocks.

The policy might even make it compulsory for big mine-owners to lend priority to small units. It has also proposed to constitute a standing advisory committee including members of different ssi associations.

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