Coal India’s monopoly to end as New Delhi lifts four-decades of curbs
MUMBAI (NewsRise) — India’s move to open up commercial coal mining to private firms is set to lure foreign giants such as BHP Billiton and Rio Tinto that have long been waiting to gain a toehold in the world’s third-largest producer of the fuel.
The decision to scrap the four-decade-long curbs on private firms will also end the dominance of state-owned Coal India to mine and sell the fuel in the country.
On Tuesday, India’s Coal Minister Piyush Goyal said the allocation of mines would be through auctions, in which local and foreign private companies can bid without end-use or price restrictions. Revenue from the auction of coal blocks would go to states, he said.
The move comes as India seeks to cut down its reliance on imported coal amid power shortages caused by the lack of availability of the fuel. More than three-fourth of the power generated in the country are from coal-fired plants.
According to the new guidelines, Indian and international companies will be allowed to bid for coal blocks with the caveat that they will bring in efficient technology into mining.