Pitching for de-regulation of the coal sector, the industry body CII on Friday said private firms should be allowed to sell the coal they mine as it would make the sector more competitive.
“The coal sector should be de-regulated and private miners should be given the right to sell the coal they mine, upon de-nationalisation,” CII said its report on Bulk Mineral Allocation methodology.
“This will add an option value to the blocks being allocated. This would also be a mechanism for creating competition in case of de-nationalisation of the coal sector,” it added.
After nationalisation of the coal mines in 1973, the mining in the sector is being undertaken exclusively by the public sector companies, with Coal India accounting for over 80 per cent of the production.
The private sector players are allowed coal mining for meeting their captive requirements in sectors like power, steel and cement.
Private players should be allowed to undertake exploration and mining activities, CII said adding this would help in accelerating its pace in the country.
The industry body further said that the Indian mining policy should take a cue from the global best practices “particularly around de-regulating the coal sector to allow private exploration and commercial mining.”
It also called for setting up of an independent coal regulator with its guidelines being used to determine prices.
CII said the regulator should have the mandate of managing the allocation process, opening new exploration areas and planning and development of mines.
The body can also ensure compliance by developers and should act as a central repository of exploration data and pricing, the trade body said.
The report further said that coal pricing should eventually tend towards market determined rates, once the supply builds up to match the demand of coal in the country.