Companies eyeing at commercial coal mining opportunity are not very optimistic but keeping their fingers crossed on the long term viability of the reform measures in the sector announced by Union Finance Minister Nirmala Sitharaman to boost the sagging economy.
The miners said they have to wait until new commercial block tenders are released to get finer details. The government is planning to immediately auction nearly 50 blocks ending the monopoly of Coal India and abolish differentiating captive and commercial mining.
The miners claimed that the minister had only reiterated almost what the government had been saying since the past few months after the amendment of the MMDR Act.
The stakeholders said they had submitted their comments on the Draft Coal Mines (Special Provisions) Amendment Rule 2020. The amendments would pave way for commercial mining without any restrictions on end-use and removing entry barriers.
The government is expected to come out with amendments shortly aiming to boost investment in the ailing economy due to the Covid-19 triggered crisis.
"I don't find anything new from the finance minister's announcements on Saturday from what we had been hearing since the past few months. We are waiting for the tender of commercial mining to decide whether it would be commercially viable," Ambey Mining president Gora Koley told PTI.
"We had asked the government to do away with the base auction price of 4 per cent revenue share and allow market forces to determine it," he said.
Ambey is engaed in contract mining and plans to foray into commercial coal mining.
Commercial coal mining is likely to remain a mirage, an official of a top industrial group said, declining to be quoted.
"So far, it seems that only those who require captive coal will participate in the so-called commercial mine auctions that provide logistic advantage and assured quality and quantity on time without worries of coal grade slippage from CIL supplies," he said.
The only noteworthy announcement from the FM was the proposed cap on the upfront payment for lease that the industry had demanded in case of large mines, the official said.
To plan for 25-30 years, commercial miners need past National Coal Index data, which is not available, he said.