Govt allows captive mines to sell 50% coal, lignite in a financial year

• The change would be applicable for both the private and public sector coal and lignite captive mines
• The availability of additional coal will ease pressure on power plants and will also aid in import substitution of coal, said the Ministry of Coal

New Delhi: Captive mines will now be allowed to sell 50 percent of the coal or lignite produced in a financial year, the Centre has announced on Tuesday. "The Ministry of Coal has amended Mineral Concession Rules, 1960, with a view to allowing sale of coal or lignite, on payment of an additional amount, by the lessee of a captive mine up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end-use plant linked with the mine," said an official statement released by the Ministry of Coal. 

Earlier this year, the Mines and Minerals (Development & Regulation) Amendment Act had been amended to this effect. The change would be applicable for both the private and public sector captive mines.

Decision will aid coal import substitution: Coal Ministry

With this amendment, the government has paved the way for releasing of additional coal in the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised, owing to limited production of coal for meeting their captive needs. The availability of additional coal will ease pressure on power plants and will also aid in import substitution of coal, said the Ministry of Coal. 

The allowance for sale prescribed quantity of coal or lignite shall also motivate the lessees to enhance production from the captive mines. Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold shall boost the revenue of the state governments. The move is likely to benefit over 100 captive coal and lignite blocks with over 500 million tonne per annum peak rated capacity as well as all coal and lignite-bearing states.

Coal/lignite captive mine leases to be available for 50 yrs

The government has also made provisions for grant of mining lease to a government company or corporation for coal or lignite for a period of 50 years. The grant of mining leases for a period of 50 years shall boost seamless continuous production of coal or lignite by government companies or corporations contributing to the coal/lignite security of the nation. The said period of 50 years can be extended by 20 years at a time upon the receipt of an application made to the state government. Therefore, enlargement of period of mining leases shall reduce multiplicity of applications for extensions, thereby ensuring continuity in mining operations.

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