The Bill amends the Mines and Minerals Development and Regulation Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act).
The MMDR Act regulates the overall mining sector in India.
This will speed up the process of implementation of projects, ease of doing business, simplification of procedure and benefit all the parties in areas where minerals are located.
In August 2019, the government announced 100 per cent foreign direct investment (FDI) under the automatic route in coal mining for open sale, besides creating associated infrastructure, such as washeries.
This opens up the sector to players outside steel and power as well as removes end-use restrictions.
It will create an efficient energy market and bring in more competition as well as reduce coal imports.
India imported 235 million tonnes (mt) of coal last year, of which 135 mt valued at Rs 171,000 crore could have been met from domestic reserves.
It might also put an end to Coal India Ltd’s monopoly in the sector.
Under the Bill
Currently, separate licenses are provided for prospecting and mining of coal and lignite, called prospecting license, and mining lease, respectively.
The bill adds new type of license that is allocation of coal/lignite blocks for composite prospecting licence cum mining lease.
Companies will be allowed to carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the central government.
The Bill clarifies that the companies need not possess any prior coal mining experience in India in order to participate in the auction of coal and lignite blocks.
The Bill provides that the various approvals, licenses, and clearances given to the previous lessee will be extended to the successful bidder for a period of two years.
During this period, the new lessee will be allowed to continue mining operations.
Under the MMDR Act, mining leases for specified minerals (minerals other than coal, lignite, and atomic minerals) are auctioned on the expiry of the lease period.
The Bill provides that state governments can take advance action for auction of a mining lease before its expiry.