Commercial mining: Out of 91 coal mines auctioned, 5 have started production, says govt

Out of 91 coal mines auctioned during the last three years, five have started production, said the Ministry of Coal
Commercial mining: Out of 91 coal mines auctioned, 5 have started production, says govt
Commercial mining: Out of 91 coal mines auctioned, 5 have started production, says govtEnergy Watch

New Delhi: Out of 91 coal mines auctioned during the last three years, five have started production, said the Ministry of Coal on Friday. Terming the commercial coal mine auctions a “tremendous success,” the ministry said that coal production from commercial coal mines was 7.2 Million Tonnes (MT) in FY022-23. “Since, first auction of commercial mining in 2020, a total of 91 coal mines have been successfully auctioned during a short period of three years in seven tranches under the commercial coal mining. Out of these 91 coal mines, nine mines have received all the permissions and five coal mines have started production,” said the Coal Ministry in a statement.

It is interesting to note that it usually takes two-five years in operationalising an opencast coal mine and three-five years in operationalising an underground coal mine in India. The government had launched the commercial coal mine auction regime in 2020 and had successfully auctioned 19 coal mines in the first tranche in November that year. The government expects most of the auctioned coal mines to start production by FY25.

Objective was increasing coal production, not revenue maximisation: Govt

“The objective of launching the commercial coal mines’ auction was to increase coal production in the country to meet the coal requirement of industries and not revenue maximisation, thereby making India Aatmanirbhar in coal,” said the Coal Ministry.

Under the commercial coal mine auction regime, in case a bidder is declared as the successful bidder for a particular coal mine, they have to pay royalty @14 percent, DMF, NMET, GST and GST compensation cess @ Rs 400 etc to the respective state governments in addition to revenue share. Also, coal mining is a highly capital-intensive industry and a huge amount is expended on operationalisation of the coal mines which subsequently results in the funds being utilised for the development and employment generation in the country.

Commercial mining: Out of 91 coal mines auctioned, 5 have started production, says govt
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Commercial coal mine auction

As per the methodology for commercial coal mines’ auctions, in case of less than two Technically Qualified Bidders, for a mine, the first attempt of auction for that mine shall be annulled and the second attempt of auction may be initiated with the approval of the Competent Authority, said the ministry. However, in case of only one bidder again in the second attempt, the matter will be referred to the ECoS for appropriate decision with respect to allocation of mine. “Till date, 11 coal mines have been allocated to different bidders with the approval of ECoS based on single bid after 2nd attempt of auction, on the basis of transparency in auction, reasonability of offer and number of rounds the mines have been offered. It may be noted that a large number of mines offered received no bid despite repeated offerings during the last seven rounds,” said the Coal Ministry.

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