Private companies can mine, sell coal
New Delhi: In a major sectoral reform in the coal sector since its nationalisation in 1973, the Government on Tuesday allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of PSU Coal India Ltd (CIL).
The opening up of commercial coal mining for private sector is the most ambitious coal sector reform since the nationalisation of this sector, coal and railway minister Piyush Goyal said while briefing the media on the decision taken in the Cabinet meeting.
Currently, private sector is allowed coal mining for captive use only.
The reform, Mr Goyal said, is likely to bring efficiency into the coal sector by moving away from the era of monopoly (of CIL) to competition and lower power tariffs. He said the move will lead to higher inves-tments and create lakhs of jobs.
The decision was taken by the the Cabinet Co-mmittee on Economic Affairs (CCEA) under the chairmanship of PM Narendra Modi.
The CCEA has appr-oved the methodology for auction of coal mines or blocks for the sale of coal under the Coal Mines (Special Provisi-ons) Act, 2015 and the Mines and Minerals (De-velopment and Regu-lation) Act, 1957, the coal ministry said in a statement.
Following nationalisation, only state-owned CIL was allowed to sell coal. Opening up the sector will also lead to energy security through ass-ured coal supply, acco-untable allocation and affordability, he added.
The methodology gives highest priority to transparency, ease of doing business and ensures that natural resources are used for national development, the statement said.
Meanwhile, the Union Cabinet also approved the setting up of a tribunal to resolve the dispute between Odisha and Chhattisgarh on sharing Mahanadi river water, official sources said.
The decision by the Cabinet comes following the Supreme Court directive to the Centre last month to form the tribunal within a month to resolve the long-standing dispute.
The Odisha government had moved the court in December, 2016, seeking an order asking Chhattisgarh to stop its construction work in projects on the upstream of Mahanadi, saying it had affected the river flow in the state.