coal sector Current Affairs - 2020

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Ordinance promulgated to amend coal mining laws

On January 11, 2020, the Government of India promulgated ordinance to amend coal mining laws in order to ease auction of coal mines.

Highlights

The GoI has promulgated ordinance to amend MMDR act (Mines and Minerals Development and Regulation act), 1957 and Coal Mines (Special Provisions) act [CMSP], 2015.

Objectives of the amendment

  • It will enhance ease of doing business
  • The amendment will democratize the coal sector. This will open the coal sector for anyone to invest.
  • It will promote FDI (Foreign Direct Investment). The amendment will remove eligibility criteria and restrictions in order to achieve this.

Amendments

  • The amendment has clarified the purpose of allocation. Previously, there was lack of clarity in interpretation of eligibility conditions in the auctions. The amendment clarifies that any company winning the auction shall carry on own consumption, sale or other purposes. This also allows 100% FDI participation
  • The Schedule II and Schedule III of the CMSP act had clauses that allowed only companies that are engaged in specific end use of coal to participate in the auction. These clauses are now removed.
  • So far, the CMSP act had been silent on reallocation of a coal upon terminations of an allocated mine. With the amendment, it is now possible to allocate the mine to the next successful bidder.
  • The amendment allows the coal mines to appoint a custodian for production.

Coal Targets of GoI

India is the second largest importer of coal in the world. The amendments will help to increase domestic production of India. It will also help India achieve its targets set. The GoI plans to increase coal production to 1 billion tonnes by 2024.

For the financial year 2019-20, the target set is 660 million tonnes.

Coal India to produce 1 billion tons of coal by 2024

On November 2, 2019, the coal Ministry has announced that Coal India Limited (CIL) will produce 750 million tons of coal by the end of financial year 2020-21. It will further increase the coal production to 1 billion tons by 2023-24.

Currently CIL has a target of 660 million tons of coal production. This is 82% of country’s coal output.

Highlights

  • At the 45th Foundation Day of CIL, the Minister of Coal and Mines announced the above target. Also, the ministry is to boost new jobs by 10,000.
  • Coal India Limited is to get associated with Jal Shakti Abhiyan to conserve water and provide treated mine water to the populace in and around mining areas.
  • Under the Corporate Social Responsibility  the CIL will participate in Tuberculosis Eradication Programme of GoI and will help eradicate the disease in and around mining areas.

Significance

  • As the demand for power is rising steeply, there is enough opportunity for both government and private sectors to produce coal without adversely impacting each other.
  • With government’s recent decision of 100% FDI (Foreign Direct Investment) in coal sector, the coal import will be greatly minimized.