India considers letting private firms mine coal for energy

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The government of India could be looking to reform coal mining by letting in private companies as supply shortage hobbles power sector growth.

The county is debating a national energy policy for an integrated approach for tapping a basket of resources to ensure India’s energy security.

“Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner,” President Pranab Mukherjee told a joint session of Parliament on Monday as a hint of the government’s intent.

At the same time, he clearly stated the government’s intent of laying down “clear and transparent policies on allocation of critical natural resources such as coal, minerals and spectrum” to check corruption.

There was no elaboration whether it would be a full-on private entry or a refreshed version of the “captive” mining plan. An amendment to the Coal Mines (Nationalization) Act of 1973 for allowing private entry has been pending since 2000 due to political opposition.

Developing Coal India's mines in joint venture with private players or allowing captive miners to sell surplus production have been on the UPA-2’s table and may be picked up by the Narendra Modi government. Alternatively, it may push for the amendment now that it has a clear majority in Lok Sabha.

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