Coal mining may be opened up to firms other than those in steel and power sectors through a legal amendment. The coal ministry is considering amending the law, possibly through an ordinance, ahead of the first commercial mining auctions expected this month.
At present, companies other than steel, power and coal washing services firms are barred from bidding for coal blocks. The Centre proposes to open it up to all firms with offices registered in India. “This will attract investments from Indian and global corporates, besides mining majors such as Peabody, BHP Billiton and Rio Tinto,” said a senior government official, who did not wish to be identified.
As per section 11A of the Mines and Minerals Development and Regulation (MMDR) Act, the Centre can auction coal and lignite mining licences to companies engaged in iron and steel, power and coal washing sectors.
The official said the clause can impede the endeavour to open up the sector through commercial mining. “The clause was earlier kept to ensure only serious players enter the sector, which was then restricted to only captive mining firms. We have to remove the condition mandating bidders to be already engaged in coal mining operations in India, to open up the sector in the true sense,” said the official. “Due to lack of time, we may even bring an ordinance to ensure success of auctions for commercial mining.”