Coal, Lignite, Atomic Minerals and Critical Minerals

In one line

Four sections carve four different regimes out of the ordinary auction rule, one for coal, one for uranium and thorium, one for moving minerals between the lists, and one for the critical minerals the Centre auctions itself.

In the wording a student can write in an exam: section 11A empowers the Central Government to select a company through auction by competitive bidding for a concession in respect of coal or lignite; section 11B empowers it to make rules regulating concessions for the atomic minerals in Part B of the First Schedule, which the State Government must then follow; section 11C empowers it to amend the First and Fourth Schedules by notification; and section 11D, inserted in 2023, requires the Central Government itself to auction a mining lease or composite licence for the minerals in Part D of the First Schedule, which are the critical and strategic minerals.

Section 11A: coal and lignite

Section 11A(1). Notwithstanding anything in the Act, the Central Government may, for the purpose of granting a mineral concession or a composite licence in respect of coal or lignite, select any of the following companies through auction by competitive bidding, on prescribed terms: a Government company or corporation, or a joint venture formed by such a company or between the Central or a State Government and any other company incorporated in India; or a company or a joint venture formed by two or more companies. The selection is to carry on coal or lignite reconnaissance, prospecting or mining operations, for own consumption, sale or for any other purpose as the Central Government determines.

The words "or sale" matter. For four decades after nationalisation a private company could mine coal only for its own captive consumption. The words permitting sale are what opened commercial coal mining, and they arrived with the amendment of 2020.

Why coal is treated separately at all. Coal was nationalised by the Coking Coal Mines (Nationalisation) Act, 1972, and the Coal Mines (Nationalisation) Act, 1973, which vested the mines in the Government and confined mining to Government companies and to captive users. The Supreme Court in 2014, in the coal block allocation matter, held the administrative allocations made between 1993 and 2010 to be arbitrary and illegal and cancelled them, and the Coal Mines (Special Provisions) Act, 2015, was passed to re-auction the cancelled blocks. Section 11A is the permanent route; the 2015 Act was the clean-up.

Section 11B: the atomic minerals

Section 11B. The Central Government may by notification make rules for regulating the grant of mining leases or other concessions in respect of the minerals specified in Part B of the First Schedule, and the State Government shall grant a concession in respect of any such mineral in accordance with such rules.