Govt announces major reforms in mining, coal sectors

The Centre on Saturday (May 16) announced several reforms in the mining and coal sectors to boost the production and attract private investments.

" 500 blocks of minerals will be auctioned in a composite exploration-cum-mining-cum-production regime," Finance Minister Nirmala Sitharaman told media persons in New Delhi.

Also, a joint auction of bauxite and coal blocks would be done to enhance the aluminium industry's competitiveness. This will help the aluminium industry reduce electricity costs.

She said the distinction between captive and non-captive mines will be removed to allow the transfer of mining leases and sale of surplus unused minerals, leading to better efficiency and production.

In the coal sector, she said the government will allow commercial mining and nearly 50 blocks to be offered immediately. There will be no eligibility conditions and anybody can bid. However, there will be only upfront payment with a ceiling.

This is against the earlier norm where only captive consumers with end-use ownership could bid.

The FM allocated over Rs 50,000 crore for creating evacuation infrastructure for coal.

Against the earlier provision of auctioning only the fully explored coal blocks, now the partially explored blocks can also be auctioned.

Apart from allowing private sector participation in exploration, this will be done via a revenue-sharing mechanism instead of the regime of a fixed rupee per tonnes.