India May Open Commercial Coal Mining to Foreign Companies

In a bid to tackle the India’s coal supply shortage – which happens despite the country sitting on the world’s fifth largest coal reserves – Prime Minister Narendra Modi is considering opening up commercial coal mining to foreign companies, according to Reuters. Companies like Rio Tinto (NYSE:RIO) would be allowed to operate in India if they set up units in the country.

As quoted in the publication:

Prime Minister Narendra Modi’s decision to open commercial coal mining to private players is a key step towards bringing order to the country’s chaotic power industry and ending the chronic blackouts that impede its economic rise.

Nearly a quarter of a century after India embraced economic liberalisation, many businesses still rely on costly back-up generators for round-the-clock power and a third of its 1.2 billion people are still not connected to the grid.

As of now, only Indian power, steel and cement companies can mine coal for their own consumption. Commercial mining is dominated by state-owned Coal India Ltd.

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