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Govt de-nationalizes coal mining

In a move that is expected to radically revive the fortunes of India’s long-struggling energy sector, the Narendra Modi-led government has decided it would de-nationalize coal mining.

In a move that is expected to radically revive the fortunes of India’s long-struggling energy sector, the Narendra Modi-led government is learnt to have decided it would de-nationalize coal mining.

CNBC-TV18’s Anshu Sharma reports, quoting sources, that at the Union Cabinet meeting held today has decided to allow commercial mining in India.

Currently, only state-run companies can mine coal in India for commercial purposes, an effort led by Coal India, which has of late increasingly failed to meet its production targets. 

This has led to India becoming the world’s third-largest coal importer despite sitting on its fifth largest reserves. The resulting coal shortage has taken a toll on the country’s power sector, as coal fires about two-thirds of power plants.

Since 1993, several private companies were allowed to mine coal but only for their end use (termed captive mining) such as power and steel production, but the decision was recently adjudged illegal by the Supreme Court — for the ad-hoc manner in which they were handed out — which de-allocated most of such blocks awarded since then.

Allowing commercial mining of coal would spur investment in the sector, bring in international miners with advanced technologies and spur production, according to experts.

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