Under the Coal Mines (Nationalisation) Act,1973 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.(i) captive mining by private companies engaged in production of iron and steel and(ii) sub-lease for coal mining to private parties in isolated small pockets not amenable to economic development and not requiring rail transport, were allowed. Considering the need to augment power generation and to create additional capacity during the VIII Plan period, the Government decided to allow private participation in the Power Sector. The Coal Mines (Nationalisation) Act,1973 was amended w.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. Mining of Coal for captive use for production of cement has also been permitted by the Government vide notification dated 15.3.96.


A.Section 3(3)(a)(iii)(the enabling provision):

Section 2.

B.For grant of mining plan, mining lease etc., the governing provisions are contained in the Mines & Minerals Development and Regulation Act,1957 and Mineral concession Rules 1960.

C.As on date captive mining of coal is allowed to companies engaged in


(i)Production of iron & Steel

(ii)Generation of Power and

(iii)Manufacture of Cement.


D.Ministry of Coal have identified a number of coal mining blocks for allocation to private / public sector for captive mining.