The Indian Government has approved a bill for auctioning of coal blocks in India for captive use by industries like steel and power.
The bill is likely to be placed in the upcoming Budget session of Parliament for amending some of the clauses of the Mines and Minerals Development and Regulation Act, 1957 (MMDR Act). It will pave the way for competitive bidding.
The MMDR Act governs the processes of allotment, exploration and mining of coal and lignite blocks.
Under the present system companies are granted captive coal blocks through a screening committee route, which examines the short-term and long-term requirements of the consuming firms.
Auctioning of coal blocks is expected to expedite the process of allocation of mining resources to consuming firms and encourage more private investment in the sector.
State-run firms, however, can obtain coal blocks for captive use through both auctioning as well as existing route.