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Govt allows sale of up to 50% coal from captive mines

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Ministry of Coal allows sale of 50 percent dry fuel from stock after meeting end use requirements

The Ministry of Coal has paved the way for sale of 50 per cent of coal or lignite produced in a financial year from captive mines after meeting the requirement of reserve linked end use plant. The mine holder will be able to sell the mineral after paying a certain amount as royalty and additional premium to the respective state governments where the reserves are located.

Coal and lignite can be sold from both private and public sector captive mines.

This decision was taken because it is generally observed in many instances that even after meeting the requirements of captive plants, which are connected to coal or lignite mines, their capacity remains under-utilised.

To facilitate this, the Ministry of Coal has amended the Mineral Concession Rules 1960. Earlier this year, the government also made changes in the Mines and Minerals (Development and Regulation) Amendment Act.

The move will help in increasing the availability of coal in the market, which can help power plants to meet their requirements. Official sources said that the reserves of coal and lignite, whose potential has not been fully utilized, will now be used to their maximum potential.

In addition, the availability of additional coal will reduce the pressure on power plants and also encourage mine owners to produce more than reserves.

Sources further said that over 100 captive coal and lignite reserves are likely to benefit from this decision.

The Coal Ministry has also decided to grant mining lease for a period of 50 years to a state-owned company or corporation for coal or lignite reserves. Sources further said that at the time of expiry, these can be extended for another 20 years.

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