Jharkhand to be benefitted by ending CIL monopoly and allowing mining by private firms

By Anita Shekhar


Ranchi-The Cabinet Committee on Economic Affairs (CCEA) has opened the new door to challenge the monopoly of the Coal India by allowing coal mining to the private sectors for commercial use. It is seen as an ambitious decision of the government to monetize the sector and bring about transformations in the coal sector.

Jharkhand will be one of the states that will be largely benefitted with this move. Lot of coal mines owned and privately operated are used mostly for captive use rather than to sell the abundant produce in open market. “This move is aimed to bring about competition and proper usage of the coal reserves in the state that amounts to 80701.19 MT pertaining to various types of coal vis-à-vis prime,

medium, semi and non-coking. The best part is it will provide an opportunity to private players to participate more in coal mining,” said cross section of official working with the private coal sector.

For reference the country has the reserves of 300 billion tonnes of coal, which is expected to bring about competition and efficiency in the mining sector. Experts in the mining sector pointed out that coal block was allotted for captive use can be used for commercial purpose.

The government has taken the note that the methodology of opening the auction to private players will accord priority to transparency, ease of doing business and the natural resources lying in abundance will be used for state and national development.

The criteria to bring forth the coal mines auctioned for captive power generation, will now be sold in an e-auction to private and global miners. Sources said that the coal mines at Hazaribagh that was meant for captive use for the private JSW Company, can now be used for selling the coal in the open market. “Whatever is required will be used by its plant at Bellary in Karnataka and the rest of the produce the company can sell out, thereby earning profits and providing royalty to the state,” one of the official in the government functioning said.

The mining sector will grow in terms of monetization and technology implementation and also create direct and indirect employment in coal bearing areas in the sector. The energy generated by the thermal plants will ensure assured coal supply and affordable power prices for consumers. It may be noted that more than 70 percent of the energy produce is dependent on thermal based power plant.

States like West Bengal, Jharkhand, Orissa, Madhya Pradesh, Chattisgarh will be largely benefitted with the move as these states have the approximately 300 Billion tonnes of reserves. At the time of bidding the entire auction amount for the particular coal block will go to the state exchequer, while the royalty will be distributed in the ration of 60:40.

This will certainly give a fillip to the growth and development of the state.

Supreme Court had cancelled 204 out of 208 coal mines in 2014. To bring transparency and accountability, the Coal Mines (Special Provisions) Bill 2015 was passed by the Parliament which was notified as an Act in March, 2015.

Leave a Reply

Your email address will not be published.