Opening up of coal sector to boost production, mining efficiency: CII

The government's decision to open up coal sector without end-use restrictions will help boost both production and mining efficiency, industry body CII said on Wednesday.

The government approved an ordinance to ease mining laws that will allow global players to enter the coal sector, Union Minister Dharmendra Pradhan said on Wednesday, terming it "a mother reform in the coal industry".

CII President Vikram Kirloskar said that allowing 100 per cent FDI in coal mining will help India not only to harness its coal reserves, which were earlier available only for captive use of steel and power, but also help many leading foreign players establish operations in India with their new age technology in mining.

This will help unleash another source of energy in times of uncertainty in global oil prices due to the ongoing conflict in the Middle East, he said in a statement.

"The opening up of the sector without end-use restrictions will also boost both production and mining efficiency besides substituting import of coal worth about Rs 30,000 crore," he said.

During 2018-19, around 125 million tonnes of thermal coal was imported by India, resulting in a forex outgo of around USD 8 billion (about Rs 57,000 crore), CII said.

It added that opening the sector will also create more employment opportunities as mining is a highly employment intensive sector.

Further, the chamber hailed the amendments made to the MMDR Act extending the validity period of clearances for two years for mining leases expiring in 2020.

"This will not only facilitate smooth transition of the leases to the new lessee but will also reduce the shortage of minerals and avoid the disruption of mining activity in the country," it said.

T V Narendran, Vice President, CII and CEO and Manging Director, Tata Steel Ltd said the Cabinet's approval for promulgation of Mineral Laws (Amendment) Ordinance 2020 will facilitate easing rules for auctioning of coal mines for commercial purposes and also for seamless transfer of clearances for mining leases expiring on March 31, 2020.