Government to auction 23 coal mines in FY18, 4 for commercial mining

This would be the first step to open mining beyond the near-monopoly of state-owned CIL for 41 years

After more than a year of deliberation, the central government has decided to open commercial mining of coal in the coming financial year.

"Next year (2017-18) in the coal sector, we will allocate 25 mines. Of these, two will be allotted and 23 auctioned, some for coking coal and some for sectors other than power, like cement, and four for commercial mining," Susheel Kumar, secretary, ministry of coal, said.

He said the process and rules were under study. "The discussion paper on commercial mining is final. We would float it in the public domain soon," said Kumar.

This newspaper reported earlier that the ministry had identified 16 mines for the commercial mining plan during 2016-17. It was postponed due to surplus coal availability.

When initiated, this would be the first step to open mining beyond the near-monopoly of state-owned Coal India for 41 years. This move is likely to enable mineral-rich states to earn more. Till now, they were getting only the royalty amount from private companies mining coal for captive use.

The blocks allotted to states last year under the new auction mechanism had stipulated end-use and no sale of coal was allowed.

However, a law passed in 2015, the Coal Mines (Special Provision) Act, allows the government to offer mines to private entities for mining and commercial sale.