In 2020, the central government introduced a policy for commercial mining with the aim of boosting coal production and reducing dependence on coal imports. For this purpose, the government has undertaken a transparent coal mine auctions after the cancellation of 204 coal mines in 2014. A press release on the progress of these auctions was issued on November 8, 2023.
Additionally, an Empowered Committee of Secretaries (ECoS) was constituted under the policy. The committee comprised of:
- Secretary (Department of External Affairs),
- Secretary (Department of Legal Affairs),
- Secretary (Ministry of Petroleum and Natural gas) and
- Secretary (Coal) as members
The committee aimed at achieving successful implementation of commercial coal mining and speedy decision-making.
Moreover, the methodology for carrying out the coal mines auctions was also elucidated. It was stated that where there are less than two technically qualified bidders, for a mine, the first attempt of auction for that mine shall be annulled. Subsequently, with the approval of the competent authority a second attempt of auction may be initiated. However, if there is only a single bidder once again, the matter will be referred to the ECoS. The ECoS will then decide on the allocation of the mine.
Presently, 11 coal mines have been allocated to different bidders with the approval of ECoS based on single bid after 2nd attempt of auction. This allocation has been on the basis of transparency in auction, reasonability of offer and number of rounds the mines have been offered. Notably, a large number of mines offered received no bid despite repeated offering during last seven rounds.
Furthermore, out of these 11 coal mines, one coal mine i.e. Gondbahera Ujheni East coal mine has been successfully won by the Adani Group i.e. MP Natural Resources Pvt Ltd. Other mines have been auctioned to others at the same percentage revenue share at which Gondbahera Ujheni East was auctioned.
Since first auction of commercial mining in 2020, a total of 91 coal mines have been successfully auctioned over a period of three years in seven tranches under the commercial coal mining. Out of these 91 coal mines, nine coal mines have received all the permissions and five coal mines have started production. Moreover, production during FY 23 from commercial mines was 7.2 million tonne(MT).
The aim of the coal mine auctions is that the coal sector be freed from distortions, vested interests and sectoral allocations. The auctions seek to bring everyone to a level playing field for efficient, fair and fast allocation of coal blocks. This meets the overarching goal of achieving Atmanirbharata in coal production in the country.
