Wednesday, August 10, 2022

Commercial coal mining: Govt launches 2nd tranche of auction, 67 mines on offer

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  • Pralhad Joshi said that the government is moving towards adopting a ‘Rolling Auction’ mechanism for conducting future auctions

  • We are making coal the driver of economic activities in the country, said the Coal Minister

New Delhi: The government has launched the second tranche of auction for commercial coal mining, offering 67 mines for sale of coal. This is the highest number of coal mines on offer in a particular tranche of auction after the commencement of the auction regime since 2014. Union Coal Minister Pralhad Joshi launched the auction process in a programme held in New Delhi on Thursday. Niti Aayog CEO Amitabh Kant and Coal Secretary Anil Kumar Jain were present on the occasion. Out of the total 67 mines on offer, 23 mines are under CM(SP) Act and 44 under MMDR Act.

The coal mines on offer are a mix of mines with small and large reserves, coking and non-coking mines and fully and partially explored mines spread across six states — Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra and Andhra Pradesh.

Auction for commercial coal mining: Govt to adopt rolling auction mechanism

The Coal Minister also said encouraged by the past success, the government is moving towards adopting a ‘Rolling Auction’ mechanism for conducting future auctions. Coal is the first mineral resource where rolling auction mechanism is being implemented in which a pool of coal blocks will always remain available for auctions.

“With rolling auctions, we will upload a comprehensive list of mines along with key technical data and bidders can submit their preferences for the mines to be included in the next tranche of auction. This would be a continuous process and would result in expediting the auction setup. Moreover, it will also help bidders in planning better and would further enhance transparency in the system,” said the minister.

We’re making coal the driver of economic activities: Joshi

Launching the auction process, Joshi said, “We are making coal the driver of economic activities in the country. There are huge opportunities that the Indian coal sector is offering. Therefore, I invite investors to come and be a part of vastly untapped coal reserves in the country. Grow your businesses and take India along on the growth course.”

“Commercial coal mining will bring in new investments, create huge employment opportunities and boost socio-economic development in coal-bearing states. A market-based coal economy will help the nation become Aatmanirbhar in coal,” the minister added.

Govt looking at reforming CIL’s existing e-auction mechanism

Joshi also said that along with promoting commercial coal mining, the government is also looking at reforming the existing e-auction mechanism of Coal India Limited and considering clubbing different e-auction windows of CIL into one. This will help in moving towards ‘One Price for One Coal Grade.’ Selling coal at market-determined prices through one e-auction window would help in simplifying the system and promoting transparency.

‘Start of commercial coal mining will improve productivity, modernisation’

“Start of commercial coal mining is the most revolutionary and progressive measure taken in the coal sector of the country. It will bring leading miners with latest technologies and cost competitiveness in the Indian coal sector. Indian coal sector will witness huge improvements in productivity and modernisation,” the NITI Aayog CEO said in his address.


1. Govt initiates next tranche of commercial coal mine auction, invites EoI for 64 mines

2. Joshi tells CIL monopoly can’t last forever, improve efficiency to deal with competition

“In this tranche of auction, special emphasis has been given on the protection of the environment. Coal blocks have been selected in those areas where forest cover is low, coal quality is good, mines are close to the infrastructure facilities and resettlement and rehabilitation has to be done at the minimum. More coking coal mines have been offered so that India’s import of coking coal can also be reduced,” Coal Secretary Anil Kumar Jain said.

The backdrop

A total of 19 mines were successfully auctioned in the first-ever tranche of commercial coal mining auctions held last year with the premium quoted by the successful bidders ranging from 9.5 percent to 66.75 percent. The agreements between the Ministry of Coal and the successful bidders were signed in January this year. States will fetch around Rs 7,000 crore of revenues from these auctions, considering production at peak rated capacity of 51 Million Tonnes Per Annum (MTPA).

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