India must reduce coal imports, become self-reliant in energy: PM Narendra Modi

NEW DELHI: Prime Minister Narendra Modi on Thursday launched the auction of 41 coal mines for commercial mining and reiterated his call for India to become self-reliant in energy by reducing imports.

Despite having the world's fourth-largest coal reserves and being the second-largest producer, the country is the second-largest importer.

"India will turn this COVID-19 crisis into an opportunity. The country will reduce its dependence on imports. To make India self-reliant in the energy sector, a major step is being taken today," Prime Minister Modi said while addressing at the launch of auctioning 41 coal mines for commercial mining.

"We are not just launching the auction for commercial coal mining but bringing the coal sector out of decades of lockdown," he said addressing the gathering by video conferencing.

The rollout of commercial coal mining is part of the series of announcements made by the Centre under the Atmanirbhar Bharat Abhiyan. It is expected to boost private sector participation which will, in turn, lead to higher production and enhance competition.

"Allowing private sector in commercial coal mining is unlocking resources of a nation with the world's fourth-largest reserves," the Prime Minister said. "It has been decided to open up the coal and mining sector for competition, capital, participation and technology," he added.

The Prime Minister said reforms related to coal sector will prove to be big in making tribal belts as well as eastern and central India into pillars of development. Commercial coal block auction is a win-win for industry users. New resources will open up, states will get more revenue and new employment opportunities will be generated, he said.

A two-stage electronic auction process is being adopted for allocation of the coal mines, according to an official statement. Upon attainment of peak rated capacity of production of 225 million tonnes, these mines will contribute about 15 per cent of the country's projected total coal production in 2025-26.

The move will provide direct employment to about 70,000 people and indirect employment to 2.1 lakh people. It is expected to generate Rs 33,000 crore of capital investment in the country over the next five to seven years. These mines will contribute Rs 20,000 crore in revenue annually to the state governments.

Allowing 100 per cent foreign direct investment (FDI) is likely to bring in international practices, the latest technologies and mechanisation in mining operations. Self-reliance with substitution of imports by independent thermal power plants and captive power plants will result in saving of foreign currency.

The initiative will ensure sustained coal stocks for industries with greater reliability. It will move the sector towards a free-market structure with the implementation of a National Coal Index.

Commercial mining of coal will promote the practice of efficient use of clean energy and reduce the scourge of environmental pollution with an incentive to coal gasification and liquefaction.