Govt plans to set up trading exchange for domestically produced coal

India plans to establish a coal trading exchange to buy and sell domestically produced coal amid growing output from mines operated by private companies, the federal government said in a notice seeking comments on the proposal.

The world's fastest growing major economy opened up coal mining to private companies earlier this decade, ending the near-monopoly of state-run Coal India, the world's largest coal miner. The privatised mines are expected to produce 350-400 million metric tons of coal by 2030.

"In the scenario of increased availability of domestic coal in the country, there is a necessity to introduce further reforms in the coal sector with focus on promoting competitive markets for sale of coal," the federal coal ministry said in a notice dated March 7.

Coal India currently accounts for about three quarters of over 1 billion tonnes of coal mined, and sold subsequently in the second largest coal market behind China.

The proposed exchange will provide a marketplace for commercial miners and those mining for their own use to sell surplus coal, alongside public sector companies including Coal India, the notice said, adding that it aims to transform the existing "one-to-many" sales model into a "many-to-many" platform.