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CONCEPT - COAL MINING IN INDIA
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- Coal in India: Coal is the most important and abundant fossil fuel in India. It accounts for 55% of the country's energy need. The country's industrial heritage was built upon indigenous coal.
- Driven by the rising population, expanding economy and a quest for improved quality of life, energy usage in India is expected to rise.
- Considering the limited reserve potentiality of petroleum & natural gas, eco-conservation restriction on hydel project and geo-political perception of nuclear power, coal will continue to occupy centre-stage of India 's energy scenario.
- A cumulative total of 319.02 Billion tonnes of Geological Resources of Coal have so far been estimated in India.
- The Coal resources of India are available in older Gondwana Formations of peninsular India and younger Tertiary formations of north-eastern region.
- The govt of India approved the opening up of coal mining and further disinvestments. It also extended the validity period of mining lease clearances ending in 2020 by two years. This is being done when the fossil fuel window is rapidly closing, and when the Indian GDP growth rate has sharply reduced.
- Earlier, 'The Coking Coal Mines (Nationalization) Act, 1972' and 'the Coal Mines (Nationalization) Act, 1973' had been repealed on 8 January 2018.
- Aim is to attract investments: To get investments in coal mining, the GoI promulgated the Mineral Laws (Amendment) Ordinance 2020.
- It allows coal mining by any company present in sectors other than steel and power
- It does away with the captive end-use criteria
- It will help create an efficient energy market, usher in competition and reduce coal imports
- It may also bring an end to state-run Coal India Ltd’s (CIL) monopoly.
- Huge reserves: India has the world’s fourth largest coal reserves, but imported 235 million tonnes (mt) of coal in 2019, of which 135mt valued at Rs.171,000 crore could have been met from domestic reserves. So there is a clear issue of inefficiency.
- Technology may come in: The liberalisation may help India gain access to sophisticated technology for underground mining used by global miners. It is clear that the window for fossil fuels is rapidly closing, and the global energy landscape evolving fast. Investment culture is totally changing, amid growing climate concerns.
- Mining targets versus reality: Govt. had earlier set a mining target of 1.5 billion tonnes of coal by 2020. Of this, 1 billion tonnes has to come from CIL and 500 million tonnes from non-CIL sources. But now, this stands revised down to 1 billion tonnes of coal by 2023-24. Step by step: The government has progressively liberalized the coal sector to attract new investments, and removed the end-use restriction.
- Strategic disinvestment: As part of the NDA government’s disinvestment agenda, the CCEA (Cabinet Committee on Economic Affairs) gave ‘in-principle’ approval for strategic disinvestment of equity shareholding of Minerals & Metals Trading Corp. Ltd (49.78%), National Mineral Development Corp. Ltd (10.10%), MECON (0.68%), Bharat Heavy Electricals Ltd (0.68%) and two Odisha state government units—Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL) (12.00%) and Odisha Mining Corp. (OMC) (20.47%) in Neelachal Ispat Nigam Ltd. This is part of the ambitious disinvestment target of ?1.05 trillion for FY20.
- History: The Indira Gandhi administration nationalized coal mining in phases – coking coal mines in 1971–72 and non-coking coal mines in 1973.
- The Coal Mines (Nationalization) Act, 1973 nationalised all coal mines in India on 1 May 1973.
- This policy was reversed by the Modi administration four decades later.
- In March 2015, the government permitted private companies to mine coal for use in their own cement, steel, power or aluminium plants.
- The Coking Coal Mines (Nationalization) Act, 1972 and the Coal Mines (Nationalization) Act, 1973 were repealed on 8 January 2018.
- On 20 February 2018, the government permitted private firms to enter the commercial coal mining industry. Under the new policy, mines will be auctioned to the firm offering the highest per tonne price. The move broke the monopoly over commercial mining that state-owned Coal India has enjoyed since nationalisation in 1973.
- In January 2020, further opening up happened.
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