New Delhi, Jan 8 (IANS): In a bid to open up the coal mining sector to attract global bidders for auctions, the Union Cabinet on Wednesday approved the promulgation of Mineral Laws (Amendment) Ordinance 2020, which would boost FDI in mining and remove end user restrictions.

The Amendment will pave the way for the first phase of coal auction during the current fiscal and will will help private companies do commercial mining of coal other than those in steel and power sectors.

The Ordinance, which will amend the Mines and Minerals (Development and Regulation ) Act, 1957, and Coal Mines (Special Provisions) Act, 2015, would do away with the requirement of previous approval in cases where allocation of blocks was made by the Centre.

The move is likely to usher in competition and reduce coal imports and may also end the monopoly of state-run Coal India Ltd (CIL).

According to the government, the move would speed up the process of implementation of projects, ease of doing business, simplification of procedure and benefit all the parties in areas where minerals are located. Coal and Mines minister Prahlad Joshi said that this will improve ease of doing business.

Industry players have praised the development, terming the move as a major reform.

Dilip Chenoy, Secretary General of industry body FICCI, said that it would pave way for the first leg commercial coal auctions within the ongoing fiscal.

"This decision will do away with the leeway provided to only steel, power and coal washeries and open the commercial coal mining bidding for all the firms. The Cabinet decision will also do away with end-use restrictions of the mining blocks and pave the way for the first leg commercial coal auctions within this fiscal," he said.

Vikram Kirloskar, President, CII, also said that the opening up of coal mining sector without any end-use restrictions is a welcome move by the government.

Kirloskar was of the view that the opening of the sector will not only lead to import substitution and save on the import bill, but will also create more employment opportunities as mining is a highly employment-intensive sector.

Ajay Kapur, CEO of the aluminium and power business of Vedanta Ltd, said: "The government's decision to do away with end-user restrictions in coal mining is a landmark reform. It shows its intent towards opening of the coal sector for attracting big ticket investments. With this, the government has addressed a key concern of global coal mining companies."