Govt amends rules to allow 50% sale of coal from captive mines

The government on Tuesday said it has amended rules with a view to allow 50 per cent sale of coal from captive mines.

The move is likely to benefit over 100 captive coal and lignite blocks with over 500 million tonnes per annum peak rated capacity as well as all coal and lignite bearing states.

“The Ministry of Coal has amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite, on payment of additional amount, by the lessee of a captive mine up to 50 per cent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine,” the coal ministry said in a statement.

Earlier this year, the Mines and Minerals (Development & Regulation) Amendment Act had been amended to this effect.

This is applicable for both the private and public sector captive mines.

With this amendment, the government has paved the way for releasing of additional coal in the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised owing to limited production of coal for meeting their captive needs.

Availability of additional coal will ease pressure on power plants and will also aid in import-substitution of coal.

The allowance for sale prescribed quantity of coal or lignite shall also motivate the lessees to enhance the production from the captive mines.

Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold shall boost the revenue of the state governments.

The government has also made provisions for grant of mining lease to a government company or corporation for coal or lignite for a period of fifty years.

Grant of mining leases for a period of fifty years shall boost seamless continuous production of coal or lignite by the government companies or corporations contributing to the coal/lignite security of the nation.

The said period of fifty years can be extended by period of twenty years at a time upon an application made to the state government. Therefore, enlargement of period of mining leases shall reduce multiplicity of applications for extensions, thereby ensuring continuity in mining operations.

Ahead of the festival season, coal supply crisis seems to have deepened as 64 non-pithead power plants are left with less than four days of the dry fuel stocks.

The latest report on coal stocks for power plants from the Central Electricity Authority (CEA) also showed that 25 such power plants had coal stocks for less than seven days as on October 3, PTI reported on Tuesday.

As many as 64 non-pithead thermal power plants had less than four days of stocks of the dry fuel.

The CEA monitors coal stocks at 135 power plants that have a cumulative generation capacity of 165 GW on a daily basis.

Overall, total coal stocks of 78,09,200 tonnes were available at the 135 plants as on October 3 and that was sufficient for four days.

The daily coal requirement of the 135 power plants with 165 GW of installed capacity is 18,24,100 tonnes.

Among the 135 plants, not even a single one had eight or more days of coal stocks.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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