Mospi proposes framework to assign monetary value to India's coal reserves
The ministry has recommended the OECD methodology for valuing coal reserves, saying it could strengthen natural capital accounting and support evidence-based policymaking
 "Mospi proposes framework to assign monetary value to India's coal reserves")
The Ministry of Statistics and Programme Implementation (MoSPI) has proposed a framework to assign a monetary value to India's coal reserves, saying the exercise would serve as a foundational input for evidence-based policymaking and intergenerational sustainability assessment.
In a discussion paper released on Wednesday, the ministry said the OECD (2025) methodology is the most suitable for India, while recommending discount rates of 6 per cent, 8 per cent and 10 per cent for analysis, thus "balancing India's near-term coal energy requirements and the imperative of sustainable resource use" and highlighting the need for better disaggregated data in official statistics to facilitate appropriate resource valuation.
The paper, titled Methodological Approaches for Compilation of Monetary Asset Accounts of Coal in India, treats coal as the illustrative case for compiling monetary asset accounts of mineral and energy resources because coal is described as "the most significant fuel mineral in India's resource endowment".
"This would place India at the forefront of natural capital accounting among emerging economies. Further, it will ensure that today's resource decisions and policies for economic growth are made with full awareness of their consequences for national wealth and the welfare of future generations," the ministry noted.
Rajib Maitra, partner and sector leader, Deloitte South Asia, said assigning a monetary value to coal reserves is a useful exercise as it treats coal as an economic asset rather than merely a physical stock. "The objective is to better understand the true economic cost of extraction, including resource depletion over time. This approach can help in estimating the long-term wealth of the nation and the potential future revenue streams from mining operations," he said.
Commenting on the potential implications of such an exercise for the coal sector, Maitra said the discussion paper signals a potential shift in the way natural capital is managed in India. If adopted, monetary valuation could influence long-term policy decisions and sustainability reporting.
He added that if "depletion costs" are formally computed and published, they may affect future revisions of mining royalties, environmental levies or resource taxes.
However, he cautioned that valuing coal reserves poses several challenges, including overestimation of economically extractable resources, variations in coal quality and ash content across seams in the same area, differing extraction costs across mines, logistical constraints, uncertainty around future thermal coal demand amid renewable energy expansion, and difficulties in monetising environmental and social costs.
The paper compares three methodological frameworks for coal valuation: OECD (2025), World Bank CWON (2024) and the Philippines-based methodology (2022). It says the OECD 2025 framework is the most operationally detailed and, in the Indian context, the most appropriate.
For India, the paper combines raw coal and lignite into a single "coal" asset because national accounts data do not separately disaggregate lignite. It says India's in-situ geological resources of raw coal stood at 400,715.45 million tonnes as of March 31, 2025, while total lignite resources were 47,370.54 million tonnes as of April 1, 2025.
Production in 2024-25 was 1,047.523 million tonnes for raw coal and 45.133 million tonnes for lignite, with pithead closing stocks of 130.887 million tonnes and 2.58 million tonnes, respectively.
Putting a price
- Coal chosen as the pilot case due to its importance in India’s energy mix
- Discount rates of 6%, 8% and 10% suggested for valuation
- Valuation could influence future royalties, levies and resource taxes
- India currently has 401 bn tonnes of coal; 47 bn tonnes of lignite reserves