Govt launches auctions for second tranche of commercial coal mining

Allocation of coal mines for commercial mining and sale by private companies would be a rolling auction. The Centre has launched the second tranche of commercial coal auction after 19 mines were awarded in the first round in November 2020.

Speaking at the launch of the second round, Pralhad Joshi, union minister for coal and mines said: “We will upload a comprehensive list of mines along with key technical data and bidders can submit their preferences for the mines to be included in the next tranche of auction. This would be a continuous process and would result in expediting the auction setup. Moreover, it will also help bidders in planning better and would further enhance transparency in the system.”

In the upcoming auction, 67 coal blocks will be offered. Out of these six are coking coal and rest non-coking (used in thermal power plants). The blocks are spread over Madhya Pradesh, Jharkhand, Chhattisgarh, Maharashtra, Odisha, and Andhra Pradesh. There are 37 mines that are fully explored, (could be brought to production immediately) and 30 are partially explored.

"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 said.

A K Jain, secretary, ministry of coal said, “In this tranche of auction those coal blocks have been selected where forest cover is low, coal quality is good, mines are close to the infrastructure facilities and resettlement & rehabilitation has to be done at the minimum. More coking coal mines have been offered so that India’s import of coking coal can also be reduced.”

Business Standard had reported recently that in order to keep the interest of new and small mining players intact in the commercial coal mining, the ministry of coal will offer only small- and medium-sized coal mines in the second tranche of auction. Most of the mines offered have been evaluated to not fall in eco-sensitive zones.

The Centre in 2020 opened the coal mining sector with private companies entering the arena of commercial mining and sale of coal–47 years after coal mining was nationalised in India. It amended the Coal Mines (Special Provisions) Act, 2015, in May to open the coal auction for non-mining, MSMEs and foreign companies. The two-part auction concluded in November when companies submitted bids for 19 out of the total 38 coal blocks on offer.

Among the winning bidders were Adani Enterprises, Hindalco, Vedanta ltd, Essel Mining of the Aditya Birla Group, Jindal Steel & Power ltd, and several new and non-mining companies such as Aurobindo Realty, Yazdani International, JMS Mining, and Boulder Stone Mart. Almost 65 per cent bidders were from the ‘non-end user’ category where the bidder is not a direct user of coal.