Coal Mines (Nationalisation) Act, 1973

The counsel for the Competition Commission of India (CCI) recently said in the Supreme Court that the Coal Mines (Nationalisation) Act, 1973, does not protect Coal India Ltd (CIL) from the competition laws.

About Coal Mines (Nationalisation) Act, 1973 –

• It was enacted by the Indian Parliament, providing for the acquisition and transfer of the right, title and interest of the owners in respect of coal mines specified in the Schedule.
• The Schedule to the Act contained a list of about 711 coal mines located in different parts of the country.
• Objective — To ensure the rational, coordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country.
• Under the Act, coal mining is exclusively reserved for the public sector.
• By an amendment to the Act in 1976, two exceptions to this policy were introduced, viz.
  • • captive mining by private companies engaged in the production of iron and steel;
    • sub-lease for coal mining to private parties in isolated small pockets not amenable to economic development and not requiring rail transport;
• It was amended e.f. 9.6.1993 to allow private sector participation in captive coal mining for generation of power, for washing of coal obtained from a mine or for other end uses to be notified by Government from time to time in addition to the existing provision for the production of iron and steel.
• Under the Act, the allotment of coal mines for captive use was based on the recommendation of a high-powered committee chaired by the Secretary, Ministry of Coal.
• Mining of Coal for captive use for the production of cement has also been permitted by the Government notification.

What are Captive Mines?

• Captive mines are the mines that are owned by companies.
• The coal or mineral produced from these mines is for the exclusive use of the owner company of the mines.
• The company cannot sell coal or mineral outside.