Indian government recently introduced the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 in order to bring structural changes in the coal mining sector by eliminating the distinction between captive and non-captive miners.
The amendment proposes to allow captive coal miners to sell up to 50% of their production after meeting the requirements of end-use plant and on paying additional royalty to the state government.
However, it was clarified that such sale would not be allowed from the coal mines allotted to a company that has been awarded a power project on the basis of competitive bid for tariff (including Ultra Mega Power Projects).
Earlier, the owner of the coal mine for specified end-use was not allowed to sell coal in open market. Later, relaxation was provided by allowing sale of 25% of coal from captive mine though a provision announced on Feb ’19.
Additional amount payable for coal sale:
Apart from maximising output from captive mines, the amendment intends to generate extra revenue from such sale in addition to royalty or payment to the District Mineral Foundation and National Mineral Exploration Trust or any other statutory payment.
The additional amount varies on the basis of which the coal mine was allocated. The same has been tabulated below for ready reference.
Moreover, the government has made an effort to expedite mining operations by providing a provision for extension of mining leases.
In case of central public sector enterprises, the period of mining leases, other than the mining leases granted through auction, would be extended on payment of an additional amount equivalent to the royalty payable for coal/lignite mines.
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