The coal mining sector in India seems to have finally taken the last step towards its de-nationalisation after more than 40 years. The Mineral Laws (Amendment) Act, 2020 (Amendment) promulgated as an ordinance in January 2020 has recently been passed by the Parliament. The Amendment seeks to allow greater private participation in the coal mining sector.
India is the world’s second largest producer of coal after China, having cumulative total coal resources of 319.020 billion tonnes (till 2018) and is dependent on coal for many of its core sectors.
For instance, coal is the largest source of electricity generation in India and as per reports, fuels approximately 74% of India’s electricity. In addition to power and electricity, sectors like iron and steel, cement and other industries like fertilisers, pulp and paper are also among the largest consumers of coal in India.
The Government of India (GoI), on its part, has been making earnest efforts to shift its focus to renewable energy, including solar and wind and is focused on achieving its target of 175 GW of renewable power capacity by 2022. Despite the ambitious plans to shift to renewable energy, India is expected to be dependent on coal for more than 45% of its electricity generation even in 2040.
A brief update on the Amendment and the key facts leading up to it are discussed in this article.
From Nationalisation to Ad-hoc Allotments to Cancellation of Allotments
The Mines and Minerals (Development and Regulation) Act, 1957 along with the rules and regulations under it (MMDRA) read with the Coal Mines (Nationalisation) Act, 1973 (Nationalisation Act) regulated the coal sector in India. Coal mines were nationalised pursuant to the Coal Mines (Taking Over of Management) Act, 1973 and the Nationalisation Act to permit only public sector participation in the sector.
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