Coal Ministry initiatives to improve mining efficiency

The recent announcement of the Central Government to have more private participation in commercial coal mining is expected to open up new window of opportunities to the mining equipment players. Earlier when such announcements happen on policy regulations, things were moving at a slower pace with no major gains. But this time after the government announcement, the Coal Ministry has already taken initiatives to re-visit old laws with an aim to improve efficiency, ease of doing business and to open up coal sector which would result in improving domestic coal production and reduce imports.

In the present scenario of coal sector, there has been dominance of public sector companies both in exploration and mining of coal. Considering the long gestation period of coal mines due to complexity of multiple laws, restrictive rules affecting entry of potential investors in the coal sector, the Coal Ministry has brought changes into the system for freedom of operations for improving coal production and to facilitate adoption of technology.

The new changes include the amendment to provide for allocation of coal blocks for composite Prospecting License-cum-Mining Lease (PL-cum-ML) to help in increasing the available inventory of coal/ lignite blocks for auction. There are provisions for any company selected through auction/allotment to carry on coal mining operation for own consumption and sale without possessing any prior coal mining experience in India. FDI policy in coal sector allows 100 per cent FDI through automatic route for sale of coal, and coal mining activities including associated processing infrastructure. There are also provisions to remove the requirement of previous approval in cases where the allocation or reservation of coal/lignite block is made by the Central Government. An allottee is entitled to utilise mined coal in any of its plants or plants of its subsidiary or holding company. To implement it, the corresponding CMSP rules and CBA rules were also amended.

As per the amendment in Mineral Concession Rule 1960, registration of qualified persons for mining plan preparation is no longer required as project proponent’s declaration in this regard will suffice. Block allocatee is empowered to make minor changes in mining plan and reducing requirement of repeated approvals, thus giving flexibility in operation. An option is now available to coal block allocatee to engage an Accredited Prospecting Agency for conduct of prospecting operation and preparation of Geological Report (GR) with a view to expedite exploration, bringing technology and faster growth of coal sector. Additional option is also made available to project proponent through accreditation system for Mining Plan Preparing Agency for preparation. Similarly, a peer review of Mining Plan to improve quality of mine planning and fast tracking approval system has also been introduced.

With a view to remove repetition of provisions from the Mining Plan which are now covered in other statutory documents, the Mining Plan structure has been simplified.  Following introduction of other laws, such as Environment and Forest Conservation etc, many overlapping information sought in mining plan has been deleted and simplified guidelines are issued. Processing of mining plan for approval has been simplified with an aim to reduce time in grant of approval. Power to approve Mining Plan delegated to subordinate authority in CCO with an interim arrangement for the interregnum. System of appeal has been introduced to bring transparency. Process has been made compatible to online approval so as to formulate an online single window clearance system.