Govt notifies rules for sale of coal from captive mines

In a bid to boost domestic production of coal, the Ministry of Coal has notified the rules that will allow sale of up to 50% of the total coal or lignite produced by the lessee of captive mines across the country. According to the government, this move will not only aid in import-substitution of coal but also benefit State governments in terms of additional revenue.

“The Ministry of Coal has amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite, on payment of additional amount, by the lessee of a captive mine up to 50 percent of the total coal or lignite produced in a financial year, after meeting the requirement of the end use plant linked with the mine,” said the ministry in a statement.

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These rules have been framed according to the Mines and Minerals (Development & Regulation) Amendment Act enacted by the Parliament earlier this year. Notably, the new rules are applicable for both the private and public sector captive mines.

“With this amendment, the Government has paved the way for releasing of additional coal in the market by greater utilization of mining capacities of captive coal and lignite blocks, which were being only partly utilized owing to limited production of coal for meeting their captive needs,” the statement added.

The statement further said that the move is likely to benefit over 100 captive coal and lignite blocks with over 500 million ton per annum Peak Rated Capacity as well as all coal and lignite bearing States.

“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,” said the statement.