The government on Tuesday said that it had amended rules with a view to allow 50 per cent sale of coal from captive mines. The move is likely to benefit over 100 captive coal and lignite blocks with over 500 million tonnes (mt) per annum of peak rated capacity as well as all coal and lignite bearing States. 

“The Ministry of Coal has amended Mineral Concession Rules, 1960 with a view to allowing sale of coal or lignite on payment of additional amount by the lessee of a captive mine up to 50 per cent of the total coal or lignite produced in a financial year after meeting the requirement of the end-use plant linked with the mine,” the Coal Ministry said in a statement today. 

Earlier this year, the Mines and Minerals (Development & Regulation) Amendment Act had been amended to this effect. This is applicable for both private and public sector captive mines. With this amendment, the government has paved the way for releasing additional coal in the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised owing to limited production of coal for meeting their captive needs. 

Availability of additional coal will ease pressure on power plants and will also aid in import-substitution of coal. The permission to sell coal or lignite will also motivate the lessees to enhance production from their captive mines. Further, payment of additional premium amount, royalty and other statutory payments in respect of the quantity of coal or lignite sold will boost the revenue of the State governments.