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CABINET APPROVES ORDINANCE ENABLING FDI IN COAL MINING

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.

Details

  • 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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June 2022
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