CoalMin proposes revised timelines to speed up mine operationalisation

Draft amendments to mining agreements introduce stricter milestone schedules and performance security provisions to fast-track commercial and captive coal mine development

The Ministry of Coal has proposed revisions to the existing timelines under commercial and captive coal mining agreements as part of its push to accelerate coal mine operationalisation. 

 

In a notice, the ministry said that it drafted amendments to the efficiency parameters under the Coal Mine Development and Production Agreement and Coal Block Development and Production Agreement. 

The draft provided a structured milestone framework from allocation to mine opening, with total operationalisation timelines of 40 months for fully explored mines, and 52 months for partially explored mines requiring preparation of a geological report (GR). 

Delays in key milestones remained linked to appropriation of performance security. Under the proposal, delays in GR preparation for partially explored mines could trigger cumulative appropriation of up to 50 per cent of performance security. 

Performance security in coal mining is a financial guarantee, usually a bank guarantee or fixed deposit receipt, submitted by a successful bidder to the government to ensure adherence to contractual obligations, including timelines for mine development and production. It acts as a safeguard against non-performance or delays. 

Delays in approval of the mining plan and environment clearance might attract a 10 per cent appropriation of this security, while delays in execution of the mining lease and mine opening permission could result in appropriation of 25 per cent each. However, the framework retained a provision allowing the refund of appropriated performance security if the final milestone such as mine opening permission or board approval was completed within the overall stipulated timeline. 

India produced over 1 billion tonnes of coal in FY25, with imports declining 8.4%, and demand is projected to reach 1.5 billion tonnes by 2030. The review followed a series of regulatory reforms introduced since the launch of commercial coal auctions in 2020, aimed at expediting coal mines operationalisation. 

Among the measures highlighted by the ministry included removal of mandatory GR approval permitting accredited private agencies to undertake exploration without requiring a prospecting licence. The ministry also eliminated the need for mandatory mine opening permission and recently identified coking coal as a critical and strategic mineral. 

Critical minerals received exemptions such as waiver of public hearing for environmental clearances ensuring faster operationalisation of such mines. The government also launched the single-window clearance system for submission and approval of the Mining Plan and Mine Closure Plan to further expedite the process to operationalise a mine. 

The proposed changes followed recommendations of a committee of industry experts constituted to review existing milestones and their timelines.

 

Stakeholders have been given 15 days to submit suggestions. 

New recommendations

• The total operationalisation timelines are 40 months for fully explored mines, and 52 months for partially explored mines 
• Delays in GR preparation for partially explored mines could trigger cumulative appropriation of up to 50 percent of performance security
• Delays in approval of the mining plan and environment clearance may attract a 10 percent appropriation of this security