asked the coal ministry to provide a level playing field and efficient environment for getting clearances. “Private-sector companies sought a level playing field with regards to getting clearances, infrastructure for evacuation of coal and allied logistics, clarity on goods and services tax-related issues to encourage them to participate in the bidding process,” said an executive.
Addressing the industry, the coal ministry officials said there will be incentives for early/excess coal production. “There will be no restrictions on the utilisation of coal,” said the official at the meeting.
Participating companies, however, pointed out the issue of delay in getting clearances, which hampered the last round of coal auctions. In 2019, around 25 coal blocks were earmarked for auction, but the bidding did not happen due to lack of interest from the industry.
Several players highlighted there is no benchmark as yet for pricing the coal to be sold from these mines. The official said revenue-sharing and royalty payments to coal-mine-bearing states “will be on notional basis”. The price of coal would be calculated based on the National Coal Index. The index is yet to be finalised.
Earlier this month, the Bharatiya Janata Party government at the Centre eased the qualification criteria and regulations for mining and selling coal in the country, thereby further easing the entry of foreign players and non-coal dependent companies in the coal mining sector.
The central government promulgated an Ordinance in Coal Mines (Special Provisions) (CMSP) Act, 2015, and the Mines and Minerals (Development and Regulation) Act, 1957, to introduce changes to the auction of coal blocks and their end-use relaxations.
Companies till now could participate in the bidding for coal blocks only if they had iron and steel, power, cement and coal gasification, and coal-to-liquid projects. The new set of amendments will also introduce more sellers of coal to India, which is currently only in the hands of state-owned Coal India. The Centre has also relaxed coal usage norms. Current private coal blocks owners would also be able to sell surplus coal in the open market.
The announcement comes four years after the Centre enabled commercial mining and sale of coal by private companies under the CMSP Act, 2015. A year later, it approved the methodology for auctioning coal mines for commercial purposes to private companies. In 2019, around 25 blocks were earmarked for auction, but the bidding did not happen.