Progressive Coal Ministry results in faster allocation of Mines to Private Sector

The Indian government has been actively auctioning coal mines through a transparent mechanism to promote increased coal production and reduce dependence on imports. After the cancellation of 204 coal mines in 2014, these mines have been auctioned for various end uses, including power and non-regulated sectors.

To further enhance coal production and reduce import reliance, a policy for commercial coal mining was introduced in 2020. Under this policy, an Empowered Committee of Secretaries (ECoS) was formed to facilitate quick decision-making and oversee the implementation of commercial coal mining. This committee includes members from various government departments.

The ECoS is responsible for making decisions on several matters related to commercial coal mining, including:

1. Determining the purpose for which a mine can be auctioned under the Coal Mines (Special Provisions) Act.
2. Reviewing and determining incentives for early production, coal gasification, or liquefaction.
3. Setting limits on the maximum number of coal mines or reserves and other parameters related to coal production.
4. Addressing issues related to the operationalization of the National Coal Index.
5. Modifying efficiency parameters, including flexibility in production.
6. Reviewing the two-stage bidding process.
7. Adjusting revenue share and other terms and conditions for unallocated mines.
8. Deciding on mine allocation in case of a single bid.
9. Revising the upfront amount for future auctions in response to market conditions.
10. Addressing any other matters related to auction methodology and coal block operationalization.

The ECoS has held nine meetings and made 27 important decisions, leading to the efficient implementation of various aspects of commercial coal mining. Since the first auction of commercial mining in 2020, a total of 91 coal mines have been auctioned in seven tranches, with nine mines receiving all permissions and five mines starting production.

These auctions aimed to increase coal production to meet industrial demand and enhance self-sufficiency in coal. The auctions also generate revenue for the government through royalties, taxes, and other charges while promoting economic development and employment generation. The focus is on coal production and industry requirements rather than revenue maximization.