Source: PIB
Subject: Economy
Context: The Union Cabinet has approved creation of a new CoalSETU window under the NRS Linkage Policy, enabling long-term coal linkages for any industrial use and exports.
About Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU):
What it is?
- CoalSETU is a new auction-based coal linkage window under the Non-Regulated Sector (NRS) Linkage Policy, allowing any domestic industrial buyer to secure long-term coal linkages for own use or export (up to 50%), except resale within India.
Ministry: Ministry of Coal, Government of India
Aim of the Policy:
- To ensure transparent, seamless and efficient utilisation of domestic coal resources.
- To promote ease of doing business and reduce dependence on coal imports.
- To boost availability of washed coal and support export opportunities.
Key Features:
- New CoalSETU Window in NRS Policy (2016):
- Allows any industrial consumer to participate in coal linkage auctions.
- Existing NRS auctions for cement, sponge iron, steel, aluminium, CPPs will continue.
- These users may also bid in the CoalSETU window.
- No End-Use Restrictions:
- Coal can be used for own consumption, washing, or export (up to 50%).
- Coking coal excluded from this window.
- Traders barred from bidding to prevent speculative hoarding.
- Export Flexibility:
- Companies may export up to 50% of allotted coal.
- Washed coal allowed for export.
- Coal can be shared across group companies as per operational needs.
- Boost to Washery Operators:
- Encourages growth of private washeries.
- Improves domestic supply of washed, cleaner coal.
- May reduce import dependence and improve export viability.
- Alignment with Coal Sector Reforms:
- Complements the 2020 reform allowing commercial mining without end-use restrictions.
- Strengthens fair, market-driven allocation of mineral resources.
Significance of the Policy:
- Promotes Transparent & Competitive Allocation: Auction-based linkages ensure fair market access and remove closed-door allocations.
- Reduces Import Dependence: By expanding domestic access and improving washed coal availability, industries can reduce reliance on costly imports.
- Supports Industrial Growth: Provides long-term assured coal supply to small, medium and new industries previously excluded.
