Prime Minister NarendraModi launched the country’s first auction for commercial coal mining and open market sales on Thursday.
This is the first big government auction this year in the midst of a potential slowdown.
Modi said that commercial mining would unlock the country’s coal sector from the “decade lockdown.”
“The country’s coal sector was entangled in a web of captive and non-captive. It was excluded from competition, (and) there was a big problem of transparency. Major scams had taken place in coal action earlier, but the system has been made transparent now,” he said.
At the event, Union Minister for Coal Prahlad Joshi said that state-owned Coal India (CIL) would continue to be the dominant player in the sector.
“We have given CIL a target of 1 billion tonnes by 2023-24, for which they will spend nearly Rs 50,000 crore in the next three to four years on land acquisition, mine development, procuring machinery, and evacuation,” said Joshi.
CIL is the world’s largest coal producer and almost a monopoly supplier of coal to India.
Earlier this year, the Central Government amended the 2015 Coal Mines Special Provisions Act to simplify the auction and draw investor interest.
The Ministry started the auction with 41 coal blocks, which are estimated to earn Rs 20,000 crore annually from the mining-bearing states.
Modi said that India should be the world’s largest exporter of coal.
Pitching for the flagship scheme of the Centre to battle Covid-induced slowdown, the PM said “AatmaNirbhar Bharat” translated into saving foreign currency on imports.
“It entails that India develop resources domestically so that the country does not have to rely on imports. It also means becoming the biggest exporter of commodities that we now import,” he said.
Modi also said there would be employment opportunities with investment in the sector. “Eastern and Central India will benefit a lot from this reform. Regions rich in coal and minerals will progress due to these reforms. These are the areas which have aspirational districts. The coal blocks that are getting auctioned today will provide lakhs of jobs in these areas,” he said.
In addition to industrial mining, the Center is also preparing to use 100 million tons of coal for gasification by 2030. He said there were four projects identified for this and about Rs 20,000 crore would be invested in coal gasification projects.
Modi said that the reforms of the coal sector will have a positive effect on many other industries, such as electricity, steel , aluminum, cement and fertilizer. “Consumption and demand are rapidly approaching the pre-Covid level. In such a situation, there can be no better time for a new beginning, “he said in a virtual address.
Vedanta Executive Chairman Anil Agarwal, Tata Group Chairman N Chandrasekaran, and Ficci Chairman Sangeeta Reddy were part of the digitally related launch ceremony.
Agarwal said that the areas where exploration of the mine would begin would be prosperous.
“I want to assure Coal India that they should not worry about any job loss. So I urge them to support us (private miners).” He asked the coal ministry to have a public hearing in the case of any dispute and have self-certification for the bidders in order to save time. He also asked the government to look at privatisation of Hindustan Copper.
Agarwal’s Sterlite Copper had almost a 40 % share of copper supply, although it was affected by the disputes surrounding its Visakhapatnam factory.
Chandrasekarian asked the Ministry to consider the possibility of setting up a coal exchange on the lines of exchange of power and commodities.
“The terms and conditions for the commercial mining are quite liberalised and it will be a successful initiative. The ministry should consider having a coal exchange, a trading platform for transparent buying and selling coal,” he said.
