Centre asks REC to consider investing in coal sector, provide financing to mines

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The coal ministry has urged REC to consider investing in the coal sector and provide financing to mines which would assist in faster operationalisation of the same. REC is a state-owned non-banking finance firm.

Speaking at a workshop on 'Customised Debt-Financing for Commercial Mining & MDOs' in the national capital, coal additional secretary M Nagaraju said the sector is becoming robust and responsible.

He said the coal ministry is taking various measures to meet the demand for dry fuel and has auctioned 91 coal mines for commercial use in the last four years. He said the financing of one coal mine has already been completed and funding for two others is at advanced stages of evaluation.

Provisions have also been made in the agreements to protect the interests of the lenders. Coal Secretary Amrit Lal Meena asked non-banking financial companies to find appropriate solutions while working on the proposals regarding credit availability for commercial coal mines.

Meena stressed that mining is a good and profitable long-term business with assured returns starting from three to four years of the allocation of coal mines. He highlighted the necessity of efficiently closing coal mines once they reach the end of their operational life and rejuvenate such exhausted mines for sustainable endeavours.

The secretary reassured the commitment to sustainable methods of mining and said the coal ministry is taking various steps to increase production from the underground mines. He emphasised that the coal sector is in the growth phase and collective efforts should be made to reduce coal imports by increasing production to meet growing domestic demand.