Government approves Mineral Laws (Amendment) Ordinance 2020

News:Union Cabinet has approved the promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend the Mines and Minerals (Development and Regulation) Act 1957 and Coal Mines (Special Provisions) Act 2015.


Key provisions of the ordinance:

Eligibility for auction:

  • Earlier,the government used to auction coal and lignite mining licences only to companies engaged in iron and steel.
  • The ordinance opens up coal mining to any firm whose office is registered in India.

Removal of restriction end-use of coal:

  • Currently,companies acquiring coal mines through auctions can use the coal produced only for specific end-uses such as power generation and steel production.
  • The Ordinance removes this restriction on the use of coal mined by such companies.

Composite license for prospecting and mining:

  • Currently,separate licenses are provided for prospecting and mining of coal and lignite called prospecting license and mining lease respectively. Prospecting includes exploring, locating, or finding mineral deposits.
  • The Ordinance provides for a composite type of license called prospecting license-cum-mining lease.

Significance of the ordinance:

  • This opens up the sector to players outside steel and power as well as removes end-use restrictions.
  • It will create an efficient energy market and bring in more competition as well as reduce coal imports.It might also put an end to Coal India Ltd’s monopoly in the sector.
  • It would help India gain access to high-end technology for underground mining used by miners across the globe.