The Supreme Court of India via its order dated 24.09.2014, cancelled 204 coal mines allocated to the various Government and Private Companies under the provisions of Coal Mines (Nationalisation) Act, 1973. To bring transparency and accountability, the Coal Mines (Special Provisions) Bill 2015 was passed by the Parliament which came into effect as an Act on 30.03.2015.
The Coal Mines (Special Provisions) Act, 2015 makes provisions for allocating coal mines by way of auction and allotment for the sale of coal. This methodology gives the highest priority to transparency, ease of doing business and ensures that natural resources are utilised efficiently for national development. On 12th March 2020 the Parliament passed the Mineral Laws (Amendment) Bill 2020, which amended the Mines and Mineral (Development and Regulation) Act, 1957 and the Coal Mines Act (Special Provisions) Act, 2015. Union Coal and Mines Minister Mr Pralhad Joshi said that this bill would boost coal production and reduce its dependence on imports.
CENTRAL THEME OF THE ACT
Coal often referred to as ‘black gold’, is the main energy source in India. The central theme of this Act is to provide for the allocation of coal mines to bidders and allotted, with a view to ensuring continuity in coal mining operations and production of coal. It also aims to promote optimum utilisation of coal resources by the requirement of the country’s needs. The introduction of this Act is expected to bring efficiency into the coal mining industry by accommodating a competitive environment.
FEATURES OF THE ACT
- Schedules I, II and III coal mines: The 204 mines whose allocation were cancelled by the judgement dated 24.09.2015, are defined in the Act as ‘Schedule-I coal mines’. The 42 mines that were already producing and ready to produce coal are defined as ‘Schedule-II coal mines’. Other 32 coal mines which are undergoing stages of development are defined as Schedule-III coal mines. The Central Government is empowered to move mines from Schedule I to schedule-III.
- Eligibility to participate in auctions: Schedule I coal mines shall be allotted by way of public auctions with no restrictions on the eligibility to participate in auctions, and the payment of fees shall not exceed Rs. 5 crores. Coal mines specified in Schedule II and Schedule III shall be auctioned to companies having a coal linkage or companies involved in the steel, cement or power sectors. A prior allottee is eligible to participate in auctions subject to payment of an additional levy.
- Central Government to act through Nominated Authority: The Central Government shall appoint an officer as the nominated authority, ranking not below the Joint Secretary to the Government of India. The nominated authority would have the power to conduct auction and allotments to the Schedule I coal mines. The nominated authority would also be responsible for transferring title, interests and rights to the highest bidder in the auctions. The central government is to act through the nominated authority.
- Central government to appoint a Custodian and Commissioner of Payments: On account of the non-completion of auctions or allotments of the coal mines, the Central Government shall appoint a Designated Custodian, to manage and operate such coal mines. For the purpose of disbursing the amounts payable to prior allottees of schedule I coal mines, a Commissioner of Payments shall be appointed by the Central Government
- Proceeds of the auction: All proceeds of the auction shall be received by the Nominated Authority and will be disbursed to the respective states. The prior allottees will be paid compensation for land and immovable infrastructure developed by them before cancelling their allotment by the Supreme Court. The Commissioner of Payments would be responsible for the disbursal of payments.
- Dispute settlement: Any dispute arising out of the actions of the Central Government, Nominated Authority, Commissioner of Payment or Designated Custodian or any dispute arising between a bidder/allotted and prior allottee shall be taken up by the Tribunal constituted under Coal Bearing Areas (Acquisition and Development) Act, 1957. The Tribunal shall hear the disputing parties and make an award in writing within a period of 90 days.
The entire revenue from the auction sales of the coal mines would directly go to the coal-bearing states, leading to an increase in revenue. This can be utilised for the growth and development of backward areas. States that would benefit the most from this Act would be the eastern parts of the country. The introduction of this Act will increase competitiveness in the coal mining sector, the best possible use of technology. It would create direct and indirect employment opportunities in the mining sector which would greatly impact economic growth and development.
India is the world's second-largest coal producer after China and is dependent on coal in many other sectors. The introduction of the Mineral Laws (Amendment) Act, 2020 seeks to involve greater participation of private companies in the coal mining sector. This would call for healthy competition leading to low prices for the consumers. The Coal Mines (Special Provision) Act, 2015 paves a way to end the coal monopoly in India and allows for greater transparency in the coal mining industry.