Opening coal sector for private companies to boost FDI

PTI

Mining mogul Anil Agarwal welcomed the Centre’s decision to open up coal mining to the private sector for commercial use and said the move will usher in much needed competition and increase domestic and foreign direct investment in the sector.

“This is a path breaking and bold reform by the government. Opening the coal sector for private players will usher in much needed competition, increase domestic and FDI investment in the sector, drive in efficiencies, as well as help in stabilising the irregularities in coal supplies and linkages,” the Vedanta Group chairman said in a statement.

The move will go a long way in making the entire coal sector vibrant and transparent, he said.

“Some of the most evident benefits of this measure would be enhanced energy sufficiency for India and availability of power at lower costs for the end consumer; also thousands of jobs will be created in the process,” he added.

Anjani Agrawal, Partner and National Leader for Metals and Mining, EY said that opening the coal sector to commercial mining was a welcome step that would accelerate adoption of technology, productivity and competitiveness into the coal sector.

However, the success, Agrawal said, will depend upon the size of blocks identified, flexibility of sales, distribution and pricing and the consistency of regulations over a long period.

“The coking coal segment should receive some urgent attention to reduce import dependency. Hopefully, access to logistics & other infrastructure will be on an even playing field,” he added. In a major reform in the coal sector since its nationalisation in 1973, the government today allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of state-owned Coal India Ltd (CIL). The opening up of commercial coal mining for private sector is the most ambitious coal sector reform since the nationalisation of this sector, Coal and Railway Minister Piyush Goyal said while briefing the media on the decision taken in the Cabinet meeting.

Source: PTI