New Policy for the Coal Sector
Coal mining continues in the public sector except for captive mining
purposes and a Bill, namely, the Coal Mines (Nationalisation) Amendment Bill, 2000, has
already been introduced in Parliament to open up the coal sector to private investment.
The Bill was referred to the Standing Committee on Energy for examination and report. The
Standing Committee has since submitted its report, which was tabled on both the Houses of
Parliament in August, 2001. The Committee has recommended for adoption of the Bill subject
to certain conditions. Meanwhile, a new policy dimension has been added by a policy
decision taken by the Government. Under this decision, the State Government companies or
undertakings are allowed to do mining of coking and non-coking coal or lignite reserves,
either by opencast or underground method, anywhere in the country, without the earlier
restriction of isolated small pockets, subject to the following conditions:
- The State Government company or undertaking (referred to as the company
hereafter) is authorised to do coal or lignite mining by its Memorandum and Articles of
- The company will do coal or lignite mining in accordance with the provisions of the Coal
Mines (Nationalisation) Act, 1973, the Mines & Minerals (Development & Regulation)
Act, 1957, the Contract Labour (Regulation & Abolition) Act, 1970, and all other
mineral, environmental and labour laws and other regulations governing the Indian coal
- For coal the company shall obtain a certificate from Coal India Limited to the effect
that the latter has no plan or willingness to undertake mining operations for coal in the
concerned area. For lignite, the company shall obtain a certificate from Neyveli Lignite
- The proposed mining area has not been allotted to a captive mining company under the
provisions of Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act, 1973.
- No financial assistance from the Central Government or Coal India Limited or Neyveli
Lignite Corporation shall be provided to the company for coal or lignite mining in the
- None of the coal or lignite mines operated by the company will be taken over by the
Central Government or Coal India Limited or Neyveli Lignite Corporation in the event of
closure of such a mine or otherwise.
- No employee of the company, engaged in a coal or lignite mine operated by it, will be
absorbed in Coal India Limited or Neyveli Lignite Corporation at any point of time.