Captive mines

Captive mines

Subject: Economy

Context:

Captive mines producing major minerals may soon be allowed to sell half their output in the open market.

Concept:

• Captive Mines: Captive mines are the mines that are owned by companies. The coal or mineral produced from these mines is for the exclusive use of the owner company of the mines. The company cannot sell coal or minerals outside. Some electricity generation companies used to have captive mines.
• Example- Other than coal, captive mines produce minerals such as iron ore, bauxite, limestone, copper, potash, lead and zinc.
• Mines and Minerals (Development and Regulation) Act, 1957 empowered central to reserve any mine for the particular end-use. These were the captive mines.
  • The government amended the MMDR Actin 2021 giving permission for open market sale of 50% of annual production from captive mines with restrictions and after payment of additional amount to state governments as royalty
• Currently, captive mine operators can sell 50% of the annual output from their mines but only after meeting the entire needs of the end-use plant for which a mineral block was originally allocated by the government.

Non- Captive Mines: Non-captive Mines are mines from which the produced coals of minerals could be used for its own consumption and as well as for selling it.