Ministry of Coal amends rules to allow 50% sale of coal from captive mines

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Ministry of Coal amends rules to allow 50% sale of coal from captive mines

Recently Ministry of Coal has notified rules for 50% sale of coal from captive mines.

The Ministry of Coal has amended the Mineral Concession Rules, 1960. Through this amendment, the lessee of a captive mine will be allowed to sell up to 50% of the total coal or lignite produced in a financial year.

In March 2021, the Mines and Minerals (Development and Regulation) Amendment Act, 2021 was passed. Its objective is to allow captive mines to sell coal.

Captive mines are those mines in which coal or minerals are produced for a particular use by the company owning the mine. In contrast, non-captive mines are those in which coal is produced as well as sold.

Significance of this step:

  • Availability of additional coal will reduce the pressure on power plants and will also help in import substitution of coal.
  • Mining potential of private coal and lignite blocks will be maximized.
  • This will also increase the revenue of the state governments.
  • The Ministry of Coal has made a provision for grant of mining lease for coal or lignite to any government company or corporation. The term of this lease will be fifty years.
  • Grant of extended mining period lease will reduce the number of applications for extension. This will ensure continuity in mining operations.

Source – PIB

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