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Government Allows Sale Of Up To 50% Coal From Captive Mines

Coal ministry has allowed sale of 50 per cent of dry fuel from reserves after meeting end-use needs

Coal Ministry has paved the way for sale of up to 50 per cent coal or lignite produced in a financial year from captive mines after meeting the requirement of the end-use plant linked with the reserve. The holder of the mine will be able to sell the mineral after paying a certain amount in terms of royalty and additional premium to the concerned state governments, where the reserves are situated.

Sale of coal and lignite can be carried out from both private as well as public sector captive mines.

The decision was taken as it has normally been seen in many instances that even after meeting the needs of the captive plant which is linked with the coal or lignite mines, their capacities remain under utilised.

To facilitate this, the Coal Ministry has amended the Mineral Concession Rules 1960. Earlier this year, the government had also effected changes in the Mines and Minerals (Development and Regulation) Amendment Act.

This move will help in boosting coal availability in the market, which could help power plants to fulfill their requirements. Also coal and lignite reserves, whose capacities are not fully utilised, will now be used to their maximum capacities, official sources said.

In addition to this, availability of additional coal will ease pressure on power plants and will also incentivise the mine owners to produce more from the reserves.

Sources further said that the decision is likely to benefit more than 100 captive coal and lignite reserves.

The Coal Ministry has also decided to grant mining lease for a period of 50 years to a state-owned company or a corporation for coal or lignite reserves. These can be extended for another 20 years at the time of expiry, sources informed further.

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