Coal Mining

The Mineral Law (Amendment), 2020

INTRODUCED BY

Introduced by

Mr Prahlad Joshi

Minister of Coal

SYNOPSIS

The mineral bill amends the two-existing legislation [i.e. Mines and Minerals (Development and Regulation) Act, 1957 and the Coal Mines (Special Provisions) Act, 2015], to give it a more comprehensive form.

The new provision allows companies which do not have any prior experience in mining to participate in coal auction, which further, helps in bringing FDI in the coal/mining sector.

HIGHLIGHTS

Salient Points ()

End use restriction removed

Companies will be allowed to carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the central government.

Eligibility for auction of coal

Now no prior experience will be required for auction of coal and lignite blocks

Composite License for Mining and prospecting

The Bill proposes to provide composite licenses for both prospecting and mining.

Transfer of statutory clearance

Environmental and forest clearances will be automatically transferred to the new owners of the mineral blocks along with other clearances for two years. This will allow the new owners to continue with the hassle-free mining operations.

Advance action for auction

The auction of the lease of mines can be started before the end of the lease term for smooth production of minerals in the country.

BACKGROUND

The previous provisions had shortcoming which was stopping the growth for the sector.

  1. Mining for self-consumption was not allowed
  2. Only companies having prior experience were allowed to bid for mining auctions, which restricted sector growth like getting FDI
  3. The separate license was needed for prospecting and mining which resulted in delays.
  4. Getting extended licenses, mining license or transfer license for new bidders was a task

The proposed amendment not only will take care of the above shortcomings but will also take care of making India foot strong in the mining sector across the world.

KEY STATS

Key Stats ()

Total import of coal in India

Rs 2.7 lakh crore

Total coal imported

235 Million Tonnes

Target to generate coal to be achieved by 2023-24

1 Billion Tonnes

TIMELINES

02 March 2020
06 Mar 2020
12 Mar 2020

WHY (as per the govt)

Salient Points ()

To promote ease of doing business for coal mining and other lignite blocks

It will help in bring more FDI in the coal and mining sector, and boost economy.

More domestic output would lead to more electricity generation and also cut oil import bill.

To encourage more players for auction and restrict the monopoly of ‘Coal India ltd.’

MEDIA SAYING

VIDEO

Videos ()

FAQs

Schedule I – Provides the list of all the coal mines for auction and allocation, which was cancelled by Supreme court in 2014

Schedule II – mines are those where production had already started before the Supreme court’s order in 2014 

Schedule III – mines are ones that had been earmarked for a specific end-use

Prospecting includes exploring, locating, or finding mineral deposit.

Reconnaissance means preliminary prospecting of a mineral through certain surveys. 

Background

Current

Proposed

Removal of restriction on end-use of coal

 

Schedule II and III mines to be used for specified end use of Power generation and steel production

Allowed for self-consumption, sale or any other purpose

Eligibility for auction of coal and lignite blocks

 

Prior experience in the field required for auction of coal and lignite blocks

No prior experience required for bidding

Composite license for prospecting and mining

 

Separate licence required for prospecting and mining

Composite license granted for prospecting and mining

Non-exclusive reconnaissance permit holders to get other licenses

 

The holders not entitled to obtain a prospecting license or mining lease

Allowed

Transfer of statutory clearances to new bidders

 

New bidder has to take all required licences/clearances before mining

All old permits and licences will be extended to new bidder for two years. And the new bidder can extract the coal from the mines but has to obtain all required licences within these 2 years.

Prior approval from the central government

 

Central government approval is mandatory granting reconnaissance permit, prospecting license, or mining lease for coal and lignite.

No prior approval required

Advance action for auction

 

Auction takes places only upon expiry of lease period

Auction can be held before the expiry of lease period

ORIGINAL BILL

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