India launched its second tranche of auction for commercial coal mining offering 67 mines for sale of coal, on March 25.
This is the highest number of mines on offer in a particular tranche of auction after commencement of the auction regime since 2014.
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.
“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,” Union Coal Minister Pralhad Joshi said while launching the auction process.
“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.” Joshi added.
Around 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% to 66.75%.
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 revenue from these auctions considering production at peak rated capacity of 51 million mt per annum.
The Coal Minister also said looking at 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.
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.