November 28, 2001

        Keeping in view the recommendations of the Committee on Integrated Coal Policy (Chari Committee), the Central Government decided in February 1997, among other things, to set up an Independent Body to perform the functions of monitoring and processing the proposals for exploration of coal and lignite in the country and allotment of new coal and lignite blocks to Indian Companies, in public and private sector, on the basis of competitive bidding. The proposal was conceived in the context of the amendment to the Coal Mines (Nationalization) Act, 1973 to allow non-captive coal mining by the private sector. Necessary action in the matter can be taken only after the Coal Mines (Nationalization) Amendment Bill, 2000 is enacted by the Parliament.

        The private Indian companies setting up or operating power projects as well as coal or lignite mines for captive consumption in such projects are allowed foreign equity upto 100 per cent provided that coal or lignite produced by them is meant entirely for captive consumption in power generation. The other private Indian companies engaged in exploration or mining of coal and lignite for captive consumption for production of iron and steel and production of cement can be allowed foreign equity upto 74 per cent. 100 per cent foreign investment in the equity of an Indian subsidiary of a foreign company or in the equity of an Indian company for setting up of coal processing plants in India is allowed, subject to the conditions that such an Indian subsidiary or the Indian company (a) shall not do coal mining and (b) not sell the washed coal or sized coal from their coal processing plants in the open market, and shall supply the washed coal or sized coal from their coal processing plants to the respective parties sending raw coal to such coal processing plants for washing or sizing.

        The above was stated by MOS for Coal & Mines, Shri Ravi Shankar Prasad in a written reply today in Rajya Sabha.