The central government will launch the first ever commercial coal mining auction in India from June 18. Prime Minister Narendra Modi will virtually inaugurate the auction process. The program has been titled Unleashing Coal: New Hopes for Atmanirbhar (self-reliant) Bharat.
As India has recently embraced Atma Nirbhar Bharat Abhiyan under, the coal & mining sector has started gearing up to make the country Atma Nirbhar in coal mining through structural reforms in the coal sector. This initiative has been taken keeping in mind that fact that because despite India having one of the largest coal reserves in the world, it continues to import coal, thereby losing precious foreign exchange. Also, India also loses local job generation opportunities for people if coal is imported. Hence, the commercial coal mining initiative will also provide huge opportunities for investment in the coal sector, which will lead to modernization and large scale employment opportunities.
It will be a historic day when Indian coal sector will break free from the shackles of restrictions to charter new growth, said Coal and Mines Minister Pralhad Joshi.
The commercial coal mining auctions are completely different from earlier regime of restricted sectors, use and price. Now there are no such restrictions. The proposed auctions have terms and conditions which are very liberal allowing new companies to participate in the bidding process, reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% FDI through automatic route allowed and reasonable financial terms and revenue sharing model based on National Coal Index. The successful bidders also will have flexibility in coal production unlike past and have provision for incentives for early production and coal gasification.
The coal mines auction process promises to lay strong foundation for energy security in the country by producing additional coal providing large scale employment and huge opportunities for investment in coal sector. These efforts will supplement the 01 billion tonne coal production likely from Coal India in FY 2023- 24 and meet full requirement of domestic thermal coal.