Why in news?

On 8th January 2019 The Union Cabinet, approved an ordinance to amend two laws to ease mining rules, enabling foreign direct investment (FDI) in coal mining.


  • The ordinance amends the Mines and Minerals (Development and Regulation) Act, 1957, and Coal Mines (Special Provisions) Act, 2015.
  • The ordinance will amend the current proviso in the law that allows only companies in coal mining to bid for coal mines.
  • The move will boost both production and mining efficiency besides substituting import of coal worth Rs 30,000 crore.
  • This is a bid to attract investments and boost domestic coal production.
  • This decision would boost the ease of doing business and increase growth avenues for coal mining.
  • It would help the Government’s aim to achieve production of 1 billion tonnes of coal by 2023-2024.
  • The move will help create an efficient energy market, usher in competition and reduce coal imports, while also ending the monopoly (while being “supported and strengthened”) of state-owned Coal India Ltd.
  • It will open up coal mining in the country to non-coal companies while removing restrictions on end-use of the fuel facilitating anyone to participate in the auction of coal blocks.

Prelims bits

  • India’s coal sector was nationalised in 1973.
  • More than 90% of the world’s total proved coal reserves are located in just ten countries.
  • The US tops the list holding more than one-fifth of the total proven coal reserves.
  • China ranks third and is the biggest producer and consumer of coal.
  • India’s proven coal reserves as of December 2018 accounted for more than 9% of the world’s total (5th Highest).
  • The major hard coal deposits of India are located in the eastern states of Jharkhand, Chhattisgarh, Orissa, and West Bengal, which account for more than 70% of the country’s coal reserves.
  • India is the second-biggest coal producer and consumer.
  • More than 70% of India’s electricity generation is based on coal.
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