Commercial mining of coal to reduce dependence on imports: FICCI

The Dollar Business Bureau

Industry association Federation of Indian Chambers of Commerce and Industry (FICCI) welcomed the Government decision for allowing commercial mining of coal and said that it will support ‘Make in India’ initiative and reduce the country’s dependence on coal imports.

The Union Cabinet on Tuesday cleared a process of bidding for commercial mining after four years after enabling the sale and commercial mining of coal through the Coal Mines (Special Provisions) Ordinance, 2014.

“FICCI welcomes Cabinet approval to introduce commercial mining of coal and sees it as a landmark policy decision that will change the face of Indian Coal Sector by ushering in rebalancing of prices and market dynamics riding on efficient and large-scale mining,” the industry association said in a statement on Wednesday.

It considers that this is an enabling measure to concurrently reinforce the Government’s ambitious ‘Make in India’ initiative and attract foreign capital to boost productivity while progressively reducing dependence on coal imports.

“A defining measure will be to create a policy framework that will enable international participation and make the coal sector subject to competition and efficient pricing,” it said.

Earlier, Coal Minister Piyush Goyal has said, “The quality of coal would improve with commercial mining and imports would come down. We want India to be self-sufficient in coal. The move aims to improve the ease of doing business in India.”

“The government has taken several measures in coal sector which will enhance competition, bring efficiency in production, reduce import, save foreign exchange and generate job opportunities,” the Minister said.

The Government, in 2015, had permitted coal mines allotment to states for mining and commercial sale to small, medium and cottage industries.

FICCI also welcomes the proposal of ascending forward auction as a means to maximise the value of a scarce resource like coal and consequent redistribution of wealth.

“FICCI believes that the ripple effect of efficient coal mining will benefit the downstream sectors of iron and steel, cement and power in improving their market access and serving a larger cross-section of buyers as a vehicle for economic growth,” the statement said.

Coal India Ltd (CIL) has been dominating the commercial mining in the country for more than four decades and has 80% market share. The other player in this field is Singareni Collieries, a venture of CIL and the Government of Telangana (earlier Andhra Pradesh). The remaining need is met via imports and production from the captive mines.