The Ministry of Coal has paved the way for the sale of 50 per cent of the coal or lignite produced in a financial year from the captured mines after meeting the requirement of the final utility plant attached to the reserve. The owner of the mine can sell the mineral after paying a certain amount to the particular state government on the basis of royalty and additional premium.
Sales of coal and lignite can be carried out from private and public sector captive mines.
This decision was made because it was common in many cases that their capabilities were not being used even after meeting the requirements of a captive plant connected to coal or lignite mines.
To facilitate this, the Ministry of Coal amended the Mineral Concession Rules in 1960. Earlier this year, the government also made changes to the Mines and Minerals (Development and Regulation) Amendment Act.
The move will help increase the availability of coal in the market, which will enable power plants to meet their needs. Official sources also said that the coal and lignite reserves, which were not fully utilized for their capabilities, would now be utilized to their maximum potential.
Apart from this, the availability of additional coal will reduce the pressure on the power plants and encourage the mine owners to produce more from the reserves.
Sources added that the decision would benefit more than 100 coal and lignite reserves.
The Ministry of Coal has decided to award a 50-year mining lease to a state-owned company or a company for coal or lignite reserves. Sources added that these could be extended for another 20 years when they expire.