More Stories

Informist, Wednesday, Feb. 19, 2025

 

KOLKATA - The coal ministry plans to soon introduce additional financial and technical incentives for companies bidding for underground mines under commercial coal mining auctions, Coal Secretary Vikram Dev Dutt said Wednesday. The ministry is in advanced stages of discussions on the matter, he said.

 

"It will be a mix of both - financial as well as process. We plan to come out with these incentives very quickly," Dutt said on the sidelines of the Roadshow on Commercial Coal Mine Auctions & Opportunities in the Coal Sector, organised by the coal ministry.

 

While Dutt did not specify the incentives or give any details on what "process incentives" could be rolled out, industry officials are hopeful that this will entail hastening various regulatory clearances and other operational aspects. The usual time taken for clearance of certificates in mining has been a dampener, industry officials said.

 

The additional incentives will have a prospective effect, said Rupinder Brar, additional secretary in the coal ministry.

 

Dutt said underground mines need to be treated differently from opencast mines. Underground mines need higher investment compared to opencast mines, as the use of technology is different and involves larger investment, according to industry officials.

Currently, companies operating underground mines need to furnish half the bank guarantee compared to opencast mines.

 

Over the past years, state-owned Coal India Ltd. has closed down a major portion of underground mines, citing technical challenges. However, superior grade coal mostly originates in underground mines.

 

Of the 113 coal mines auctioned successfully so far, 37 are underground, said Venkateshwarlu Marapally, technical director in the coal ministry. Of the 113 mines, a total of 14 are operational and another 14 will soon be opened. Nine of the first 14 mines will reach production stage very soon.

 

The coal ministry will launch the 12th tranche of coal mine auctions in March, and is likely to offer 25-30 blocks at the auctions, ministry officials said.

 

"The blocks are in various stages of exploration and have a production capacity ranging between 1 million tonnes to 15 million tonnes. On an average, each of the blocks which will come up for auctions in the 12th round will have 5 million tonnes of production capacity," Brar said.

 

In the onging 11th tranche of commercial coal mine auctions, a total of 27 blocks are being auctioned. For these blocks, 72 bids were received. A total of 17 blocks could be made operational from these bids, Brar said.

 

Dutt said that in the current financial year, production from captive and commercial coal blocks was 157 million tonnes as on Feb. 11. The production target from these sources is 170 million tonnes for the current financial year, which Dutt said could be achieved. For the next financial year, the ministry is targeting to produce 210 million tonnes of coal from captive and commercial mines.

 

Coal India Chairman P.M. Prasad said the company would not face any impact on its sales even if private miners commence production and sales.  End

 

Reported by Avishek Rakshit
Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.