Coal consumption will rise for next 2 decades at least: Coal Secretary tells investors

New Delhi: Assuring potential bidders of full support from the Central and state governments, Coal Secretary Amrit Lal Meena told commercial coal mine investors on Tuesday during a roadshow in Ranchi that they should invest in the sector as the consumption of coal is only going to rise for the next two decades. Addressing the roadshow virtually, Meena said that even though commercial coal mine owners are free to sell their coal in the open market, the government is in the process of planning a coal trading exchange to facilitate miners in discovering a fair price for the fossil fuel.

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He also emphasised that investors should participate in the coal mine auctions as coal mining business is highly profitable which can be seen from the coal mines which have already started coal production under commercial mining.

The Ministry of Coal organised a roadshow in Ranchi where the Coal Secretary was the chief guest and Additional Coal Secretary and the Nominated Authority M Nagaraju and Jharkhand’s Mines Secretary Aboobacker Siddique P were the Guests of Honour and Coal India Limited’s (CIL) Chairman PM Prasad was the special guest for the event.

Govt to commercial coal mine investors: Coal demand is only going to increase

Nagaraju welcomed all investors and informed the forum about the coal reforms undertaken by the Ministry of Coal to improve the attractiveness of the coal auction process and make it more investor-friendly. “Coal has a lot of future in this country. The Power Ministry has recently announced that we are going to set up new thermal power plants and CIL is also planning to set up new thermal power plants. India is still importing a lot of coal. And our demand is only going to increase at least 2032-35. There is lot of scope to produce coal in India,” said Nagaraju. He urged investors to get into coal mining.

The CIL Chairman applauded the efforts of the Ministry of Coal in making commercial coal mine auctions a success by auctioning 91 coal mines in a such a short span of time. He also welcomed the steps being taken by the Ministry in providing support by launching Single Window Clearance system and setting up a Project Monitoring Unit to help the successful allocatees of the coal mine in early operationalisation.

Commercial coal mine auction

Coal Ministry has so far completed the successful auction of 91 coal mines in the first seven tranches and has launched the process for auction of 35 coal mines under the 8th round of commercial auctions and four coal mines under the 2nd attempt of the 7th round of commercial auctions which had received single bids in the first attempt on November 15. The bid due date is January 29. Additionally, the 9th round offering 27 coal mines and five coal mines under the second attempt of the 7th round has also been launched on December 20, 2023. The bid due date for the 9th round is February 19.

Key features of the auction process include reduction in upfront amount and bid security amount, submission of bid security in the form of NEFT/RTGS, permission to relinquish part of the coal mine in case of partially explored coal mines, the introduction of National Coal Index and National Lignite Index, ease of participation with no entry barriers, full flexibility in coal utilisation, optimised payment structures, efficiency promotion through incentives for early production, use of clean coal technology and Rebate for Performance Security for underground mines.

The sale of tender document commenced on November 15, 2023, for 8th round and from December 20,2023 for 9th round of commercial coal mine auction. Details of the mines, auction terms, timelines etc. can be accessed on MSTC auction platform. The auction shall be held online through a transparent two stage process, on the basis of Percentage Revenue Share.

SBI Capital Markets Limited, the sole Transaction Advisor to Ministry of Coal for the commercial coal mine auctions, is assisting the Ministry of Coal in conduct of the auction.

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