The Union government has opened up the mining sector in a big push for privatisation. Though non-coal minerals were available to the private sector, including foreign players, for bidding, private companies could take up coal blocks only if they had defined downstream projects where the mined coal could be used.
Besides, the government decision to introduce joint auction of bauxite and coal mineral blocks to enhance the aluminium industry’s competitiveness by lowering electricity costs would reduce dependence on imported coal.
Non-ferrous companies such as Hindalco Industries and Vedanta have had to buy coal at a premium in auctions to have uninterrupted supply for their smelters.
