Coal Production and Self-reliance

Key Highlights:

• The Mines and Minerals (Development and Regulation) Amendment Act, 2021 allows captive mine owners to sell up to 50% of their annual coal production in the open market.
• A Single Window Clearance portal and Project Management Unit (PMU) have been established to expedite coal mine operationalization.
• Commercial mining auctions on a revenue-sharing basis were launched in 2020, offering incentives for early production and coal gasification/liquefaction.
• Timelines for coal block operationalization have been reduced from 51 to 40 months for fully explored blocks and 66 to 52 months for partially explored blocks.
• Coking Coal has been declared a Critical Mineral, and the Coking Coal Mission launched to enhance domestic supply and reduce imports.
• Annual Contracted Quantity (ACQ) for power plants has been increased, and Imported Coal Based (ICB) Plants can now secure coal under the Revised SHAKTI Policy, 2025.
• Since June 2020, 132 coal blocks have been allocated under commercial mining, with 15 already in production.
• Rehabilitation of Project Affected Families (PAFs) is ensured as per the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act, 2013) and Coal Bearing Areas (Acquisition and Development) Act, 1957 (CBA Act, 1957).

Detailed Insights:

• The MMDR Act, 2021 amendment aims to boost domestic coal availability and reduce import dependency by allowing captive mines to sell surplus production.
• The Single Window Clearance portal streamlines various approvals, while the PMU provides crucial handholding support to coal block allottees.
• Commercial coal mining terms are liberal, including 100% Foreign Direct Investment (FDI) through the automatic route and revenue sharing based on the National Coal Index.
• Regulatory reforms include dispensing with the requirement of Prospecting License (PL) for accredited agencies and government approval of Geological Reports (GRs).
• Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) are adopting modern technologies like Mass Production Technologies (MPT) and developing infrastructure such as Coal Handling Plants (CHPs).
• Increased ACQ and extended tenure of coking coal linkages under the Non-Regulated Sector (NRS) linkage auction are designed to enhance domestic coal supply.
• A new sub-sector 'Steel using Coking coal through WDO route' and the CoalSETU window under NRS linkage auctions aim to increase domestic coking coal consumption and availability.
• Environmental sustainability initiatives include extensive plantation, mine water utilization for community use, development of eco-parks, and adoption of energy-efficient mining.
• Specific sustainable practices involve promoting blast-free mining technologies, implementing dust mitigation measures, and ensuring scientific closure of mines.
• Transparency in compensation and rehabilitation is ensured by R&R committees headed by District Collectors, with land possession occurring only after due benefits are paid.

Key Concepts Involved:

• Mines and Minerals (Development and Regulation) Amendment Act, 2021 (MMDR Act): Legislation allowing captive mine owners to sell a portion of their mineral production in the open market.
• Commercial Mining: Auctioning of coal blocks to private entities for commercial sale, moving away from captive consumption.
• National Coal Index: A price index used to determine the revenue share in commercial coal mining, reflecting market dynamics.
• Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act, 2013): A law governing land acquisition and ensuring fair compensation and rehabilitation for affected persons.