COVID-19 stimulus: Coal auctioning move along the lines of January ordinance

The Centre had relaxed norms required for mining and sale of coal in January 2020

By Kundan Pandey
Published: Saturday 16 May 2020

Union Finance Minister Nirmala Sitharaman on May 16, 2020 announced an end to government monopoly in coal mining and allowed ‘open-access auctioning’ of coal mines to cushion the effect of novel coronavirus disease (COVID-19) outbreak in the country.

However, the measure is simply a reiteration of the Union cabinet’s January 2020 ordinance — the Centre had relaxed norms required for mining and sale of coal. It had eased norms regarding entry of foreign players and non-coal dependent companies in the coal mining sector.

The minister on May 16, as part of Union government’s fourth tranche of the Rs 20 lakh crore relief package, said the government will open coal mines for commercial mining. She added that India imports a large amount of coal despite having the third largest-valued coal mines in the world. Regulation was, therefore, required in the face shortage, she said.

She said 50 such coal blocks will be auctioned initially. The blocks that have been only partially explored will also be considered for the same.

In January 2020, the Centre promulgated an ordinance in Coal Mining Special Provision (CMSP) Act, 2015 and Mines & Minerals Development Act (MMDR), 1957 to bring changes in coal block auctioning. The government has been trying to push for privatisation of coal auctioning for the last few years.

Four years ago, the Union government allowed commercial mining and sale of coal by private players. It was done through CMSP Act, 2015.

The Centre approved a methodology in 2016 which was to be used by private companies to auction coal mines for commercial purposes. In 2019, the government earmarked 25 blocks for auction; but bidding did not take place.


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