Lok Sabha Question No. 682 (UNSTARRED), answered on 2020-02-05
Subject: Ordinance in MMDR and CMSP Act
Ministry: COAL
Asked by: Adala Prabhakara Reddy, Sangeeta Kumari Singh Deo, Chandra Sekhar Bellana, Midhun Reddy, Vinod Kumar Sonkar, Raja Amareshwara Naik, Jayanta Kumar Roy, Sukanta Majumdar, Bhola Singh, Kotagiri Sridhar

## GOVERNMENT OF INDIA

## MINISTRY OF COAL

## LOK SABHA UNSTARRED QUESTION NO. 682 TO BE ANSWERED ON 05.02.2020

## Ordinance in MMDR and CMSP Act

## 682. SHRI ADALA PRABHAKARA REDDY:

SHRIMATI SANGEETA KUMARI SINGH DEO:

SHRI CHANDRA SEKHAR BELLANA:

SHRI  P.V. MIDHUN REDDY:

SHRI VINOD KUMAR SONKAR:

SHRI RAJA AMARESHWARA NAIK:

DR. JAYANTAKUMAR ROY:

DR. SUKANTA MAJUMDAR:

SHRI BHOLA SINGH:

SHRI SRIDHAR KOTAGIRI:

Will the Minister of COAL be pleased to state :

- (a) whether Government has promulgated an ordinance to amend the MMDR Act, 1957 and the CMSP Act, 2015 to boost FDI in coal mining;
- (b) if so, the details thereof and the benefit thereto;
- (c) whether the Ministry of Coal is in process of initiating the auction of coal mines for sale of coal;
- (d) if so, the details thereof;
- (e) whether  the  Ministry  has  decided  to  issue  new  guidelines  and  simplified  approval process for Coal Mining Projects and if so, the details thereof; and
- (f) the other steps being taken by the Government to open up new areas of growth in the coal and mining sector?

## ANSWER

## MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI)

(a &  b): An  Ordinance, titled 'Mineral Laws  (Amendment)  Ordinance, 2020' has been  promulgated on 10.01.2020 for amendment in the Mines and Minerals (Development and Regulation) Act, 1957 [MMDR Act] and the Coal Mines (Special Provisions) Act, 2015 [CMSP Act].  The Ordinance was not made specifically to boost FDI in coal mining.  One of the objectives of the Ordinance is to allow wider participation in auction of coal blocks for a variety  of  purposes  such  as  own  consumption,  sale  or  for  any  other  purpose,  as  may  be specified by the Central Government including through FDI in coal mining.

- (c & d): Yes,  Sir.  Discussion  paper  on  auction  of  coal  mines  for  sale  of  coal, containing  key  terms  &  conditions  have  been  published  for  Stakeholders'  consultations  on 14.01.2020.
- (e): Yes, Sir. Revised guidelines for preparation of Mining Plans has been issued on 16.12.2019 and are available on the website of the Ministry of Coal.

(f): Following policy measures have been taken to open up new areas of growth in the coal & mining sector:

(i)         Mineral  Laws  (Amendment)  Ordinance,  2020,  has  enabled  the  allocation  of  coal blocks for composite prospecting license-cum-mining lease (PL-cum-ML) which will help in increasing of the inventory of coal/ lignite blocks for allocation.

(ii)         With  the  promulgation  of  Mineral  Laws  (Amendment)  Ordinance,  2020,  the repetitive  and  redundant  provision  requiring  previous  approval  of  the  Central  Government even in cases, where the allocation or reservation of coal/ lignite block has been made by the Central Government itself has been done away with. This would significantly reduce the time taken for operationalisation of coal/ lignite mines.

(iii)      Earlier,  the mines  in  Schedule  II  and  III  of  CMSP  Act  could  only  be  auctioned  to companies that are engaged in specified end use. With the promulgation of Minerals Laws (Amendment) Ordinance, 2020 the flexibility to the Central Government in deciding the end use of Schedule II and III coal mines under the CMSP Act has been provided. This would allow  wider  participation  in  auction  of  Schedule  II  and  III  coal  mines,  for  a  variety  of purposes such as own consumption, sale or for any other purpose, as may be specified by the Central Government.

(iv)       There was lack of clarity earlier in the language of the provisions in the Acts, leading to restrictive interpretation of the eligibility conditions in the auction. Sections 4(2) and 5(1) of  the  CMSP Act  and Section 11A of the MMDR Act have been amended now clarifying that any company selected through auction/ allotment can carry on coal mining operation for own  consumption,  sale  or  for  any  other  purposes,  as  may  be  specified  by  the  Central Government. allowing wider participation and competition in auction. Thus, the companies which do not possess any prior coal mining experience in India can also now participate in auction of coal blocks.

(v)         Methodology  for  allowing  allocatees  of  coal  mines  for  specified  end  use  or  own consumption  to  sell  upto  25%  of  actual  production  in  open  market  (ROM  basis)  with payment of additional premium on such sale has been approved by CCEA on 19.02.2019 and order  has  been  issued  on  07.03.2019.  Under  this  methodology,  10  mines  have  since  been allocated in the year 2019.

* * * *