Coal news and updates

Govt allows commercial coal mining by PSUs

The government on Wednesday approved allotment of coal blocks to public sector entities for commercial mining, taking the industry a step closer to complete deregulation and allowing private entry.

The decision, though limited to selling the commercially-mined coal to small and medium and cottage enterprises, marks the first big-ticket reform in the sector after blocks were auctioned last year on a prompt from the Supreme Court.

Coal mining for commercial sale has remained a monopoly of state-run Coal India, the world's largest miner of the Black Diamond. Private companies are allowed to mine coal only for specific captive use, which is clearly defined during allotment of mines.

Agencies quoted coal secretary Anil Swarup saying the decision would not impact Coal India or change its status.

"Keeping in mind the interest of small and medium enterprises, the government took the decision to allocate coal blocks to state government and state entities. This is without end-use stipulation so that they can in turn mine coal and allocate or sell coal to such entities, thereby removing the end use stipulation which was mandated for coal blocks allocation earlier," the reports quoted Swarup as saying.

A government statement said the decision would also enhance domestic production of coal for meeting growing demand and potentially cutting down imports. It said coal-bearing states would get additional revenue from such mines "equal to the amount of royalty on the quantity of coal produced on a monthly basis" during the lease period/life of the mine as well as one-time upfront payment, which is 10% of the intrinsic value of coal in the mine. These would be recoverable in three instalments in the first year of allotment.

It is expected that the incremental coal produced from such coal mines would cater to the unmet demand of the coal in the country, especially of medium, small and micro industries and bridge the gap between demand and supply considerably, the statement added.

The Cabinet also approved a policy for developing underground coal gasification in coal and lignite areas.

source: http://timesofindia.indiatimes.com