The Coal Consumers' Association of India today welcomed the Centre's move to open up the coal sector for commercial mining by private parties.
Coal production is likely to be increased in the coming years transforming to a competitive market scenario. The key features of this step are the government has allowed 100 per cent foreign direct investment (FDI) in commercial mining and export of coal as well, the association said in a statement.
In a major reform in the coal sector since its nationalisation in 1973, the government yesterday allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of state-owned Coal India Ltd (CIL).
Sourcing of the fossil fuel would be easier due to availability of coal and competition; prices are expected to be reasonable, quality would be better, logistics may improve resulting in less environmental impact and consumers would be able to procure coal suited to their requirement, it said.
The association said, however, success of the move would be determined by regulations and norms pertaining to auction of mines, size of the mines to be offered, reserve price for auction of mines and other issues.
The move would also benefit the mining sector as new technologies would be introduced, create new job opportunities and boost the equipment manufacturing industry, the association said.
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