Additional incentives lined up for underground coal mine auctions

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The coal ministry is planning additional incentives to boost underground commercial coal block auctions.

 

Coal Secretary Vikram Dev Dutt said an incentivisation framework was at an advanced stage of discussion.

 

“Apart from what is already available for underground mining, there would be a couple of other incentives,” he said.

 

He was speaking at a roadshow organised by the Ministry of Coal on opportunities in the coal sector and commercial coal mine auctions in Kolkata.

 

Responding to queries from investors on whether the incentives for underground mines would be applicable to prospective blocks or already auctioned blocks, Rupinder Brar, additional secretary and nominated authority, Ministry of Coal, said, “Any amendment that comes would be prospective. That is the position as of now.”

 

Government officials acknowledged that underground mining had its “fair share” of challenges. But it was a thrust area of the government for its sustainable footprint compared to open cast mining and minimal displacement.

 

The road show held on Wednesday is for upcoming commercial mine auctions.

 

The 11th round of commercial coal mines’ auction is currently ongoing and technical bids are under evaluation.

 

Dutt said that it had received an unprecedented response in terms of bids so far and it would set the tone for a higher growth trajectory in the future.

 

In terms of growth, he said that commercial coal mining had been consistently clocking a growth of more than 30 per cent.

 

Last year, the production was about 147 million tonnes (mt) from both captive and commercial space. This year, it is already at 157 mt, including 20 mt from commercial mines, and is poised to cross the 170 mt target.

 

A total of 65 bids were received against 15 coal mines offered in the 11th round.

 

Under the second attempt of the 10th round, a total of 7 coal mines were put up for auction and 5 bids received against 5 coal mines with each mine receiving 1 bid each.

 

For the 12th tranche, the ministry plans to auction a similar number of blocks.

 

On the impact of commercial mining on Coal India, Chairman P M Prasad — who was present at the road show — said there was no impact.

 

Moreover, he does not see an impact in the next 5-10 years as there is a demand-supply gap and Coal India is also improving efficiencies and production parameters.