MMDR Act & Coal Mines (Special Provisions) Bill - Ending govt. control.

MMDR Act & Coal Mines (Special Provisions) Bill - Ending govt. control.

Question - Ending government monopoly over coal extraction is imperative for improving access to fossil fuel resources. Discuss the Mines and Minerals (Development and Regulation) Amendment Act 2015 and Coal Mines (Special Provisions) Bill 2015 in this context.

Mines and Minerals (Development and Regulation) Amendment Act 2015

• This Act regulates the mining sector and specifies the mining leases for operations

• Bill adds a fresh Fourth Schedule to the Act including bauxite, iron ore, limestone and manganese ore as notified minerals

• Bill creates a fresh category of mining license

• It also specifies the maximum area for mining as well as lease period and lease extensions

• Act provides state governments should grant mining and prospecting license cum mining leases for notified and other minerals

• Act has also specified conditions regarding transfer of mineral concessions and creation of institutions such as District Mineral Foundation and National Mineral Exploration Trust

Coal Mines (Special Provisions) Act 2015

• This Act has also made provisions for allocation of coal mines through e-auctions and a bidding process which is transparent

• e-auction of coal will lead to optimal utilisation of resources and ensure effective coal mining operations

• Act also facilitates such auctions for private firms and captive use; it is focused towards providing allotment to state and central PSUs

• Provisions have also been made for rehabilitation services for persons displaced due to mining activities

• Act gives provisions for vesting the right, title and interest pertaining to infrastructure and leases for bidders in the mining sector

Impact of the Bills

• Both the Mines and Minerals (Development and Regulation) Amendment Bill 2015 and Coal Mines (Special Provisions) Bill 2015 are important steps forward in the reforms push of the Central government.

• This ends the exclusive control of the government over coal extraction since 1973 when coal mining was nationalised

• Parliamentary approval for auction of coal blocks provides conclusion to the ordinance which the Bill now does away with

• Apart from revenue for the states, the passage of Bills will also open up the route for this sector’s foreign investments

• Indian arms of foreign companies have received entitlement to bid for blocks as well as commercial mining of coals which will have impact on prices moving forward

• Despite reserves of 301 billion tonnes, which is the fifth largest in the world, India still suffers from coal shortage

• This could change with cessation of government monopoly on coal

• 90 million tonnes of coal are expected to be generated from 42 operational mines in blocks auctioned till now

• This will impact individual consumers as well as companies as it will unlock the potential of India’s massive coal reserves

• The bills will also clear the way for major reforms by the NDA government as far as coal mining and mines and minerals are concerned

• Move will benefit state owned Coal India Limited as well

Facts and Stats

• Allocation of 204 coal blocks to private parties was cancelled by the SC on the grounds that the allocation was illegal

• Auctions have provided coal bearing states with the means of realising INR 2 lakh crore through royalties over a period of 3 decades from 33 blocks auctioned during the first round

• As per the media, internal government estimates hold that revenues from all 204 blocks will exceed INR 15 lakh crore over a period of 3 decades