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energy | IST

Coal ministry notifies rules for 50% sale of coal from captive mines

Mini

Move expected to impact more than 100 coal mines, which have peak rated capacity of 500 million tonnes per annum. The rule will be applicable for both private and government companies.

Amidst raging demand for coal to meet the electricity demand, the coal ministry on October 5 notified rules allowing captive coal miners to sell 50 percent of its mining capacity in the open market. This move is expected to impact more than 100 coal mines, which have peak rated capacity of 500 million tonnes (MT) per annum.
“The allowance for sale of prescribed quantity of coal or lignite shall also motivate the lessees to enhance the production from the captive mines. Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold shall boost the revenue of the state governments,” highlighted the coal ministry release.
The move comes at a time when power plants are struggling with coal stock availability and is expected to ease supply to power plants and also help curb coal imports. As on October 4, 97 coal-based power plants have coal stock of only four days. Availability of coal at power plants for 15 days is the norm for normal operations.
“This is a great move and will ensure coal availability increases with increase in electricity demand. It will take at least 1-2 years to fructify coal production increase and availability in the market,” said an analyst.
The rules allowing 50 percent sale of coal will be applicable for both private and government companies. The government companies will also be allowed to extend lease of mines for 50 years and thereafter provision of extending lease to 20 years will be available at the time of application with the state.
India imported 215.25 MT coal in FY21, and provisional imports for FY22 stand at 62.35 MT.