India launches auction for second part of commercial coal mining

New Delhi: India today started the second part auction for commercial coal mining. It has 67 mines offered. This is the highest number of mines offered in any part since the auction system started in 2014.

The auction process was launched by Union Coal Minister Prahlad Joshi at an event held in New Delhi. NITI Aayog CEO Amitabh Kant and Coal Secretary Anil Kumar Jain were present on the occasion.

Of the 67 mines offered for auction by the Ministry of Coal, 23 mines are covered under the CM (SP Act and 44 mines under the MMDR Act.) Small and big, coking and non-coking mines and fully or partially searched Gaya mines are spread over six states – Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra and Andhra Pradesh.

Launching the auction process, Prahlada Joshi said that we are making coal a catalyst for economic activity in the country. The Indian coal sector has immense potential. That is why I invite investors to come and be a part of locating the coal reserves in the country. Grow your business and take India on the path of development.

Prahlada Joshi said that commercial coal mining will bring new investment, create huge employment opportunities and promote socio-economic development in coal producing states. He said that the market-based coal economy would help in making the country self-reliant in the coal sector.

The coal minister said that given the success of the past, the government is moving towards adopting a “rolling auction” system for future auctions. Coal is the first mineral resource in which the rolling auction system is being implemented. In this arrangement, pool of coal blocks will always be available for auction.

Prahlad Joshi said that with the rolling auction we will upload a detailed list of mines with important technical data and bidders can submit their preference for the mines to be included in the next part of the auction. This will be a continuous process and will speed up the auction system. He said that this will help the bidders to make better policy and increase transparency in the system.

The Coal Minister said that along with promoting commercial coal mining, the Government is considering improving the existing e-auction system of Coal India Limited and unifying the various e-auction windows of CIL. This will help in moving in the direction of a price for a coal grade. He said that the sale of coal through e-auction at market determined prices would help in simplifying the system and encouraging transparency.

On this occasion, CEO of NITI Aayog, Shri Amitabh Kant said that starting commercial coal mining is the most revolutionary and progressive step taken in the coal sector of the country. This will bring leading miners to the latest technology and cost competitiveness in the Indian coal sector. He said that the Indian coal sector would see massive improvement in productivity and modernization.

Coal Secretary Anil Kumar Jain said that special emphasis has been laid on environmental protection in this part of the auction. Coal blocks have been selected in areas where the forest area is low and the quality of coal is good, near the mine infrastructure and inhabited habitats. He said that more coking coal mines have been offered to reduce India’s dependence on coking coal exports.

In the first part of the auction, 19 mines were successfully auctioned last year and the premium is quoted from 9.5 percent to 66.75 percent by the successful bidders. Given the peak production capacity of 51 million tonnes per annum (MTPA), these auctions will generate a revenue of Rs 7,000 crore to the states.