Coal India awards 23 abandoned mines to private players on revenue-sharing basis

Coal ministry to launch 10th round of auction for 60 commercial mines on Friday

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In FY24, India produced 997.4 MT of coal and aims to produce 1,080 MT in the ongoing financial year. In FY24, India’s coal imports increased by 7.7 per cent to 268 MT.

In a move aimed at boosting domestic coal production, state-owned Coal India Limited (CIL) has awarded 23 of its discontinued underground mines to private players. These mines, which come readily available mining infrastructure and have a combined production capacity of 34 million tonnes per annum (MTPA), will be operated by successful bidders under a revenue-sharing model. Private sector coal miners bid to share a minimum of 4 per cent revenue with CIL for a period of 25 years, marking a step towards further harnessing the nation’s coal resources through public-private partnership.

Of the total 34 abandoned mines identified by CIL, ten each are under its West Bengal- and Jharkhand-based subsidiaries, nine under its subsidiaries operating in Maharashtra, Chhattisgarh, and Madhya Pradesh, three under its Odisha-based subsidiary, and two under a Jharkhand-based subsidiary. CIL is identifying more such mines for auctions under the revenue-sharing model.

“Earlier, CIL had identified a total of 34 discontinued mines where good quality coal reserves are lying dormant but may not be financially viable for CIL to mine them. CIL has decided to tender and offer these [23] mines to willing private sector players who are prepared to operate and produce the dry fuel and share part of the revenue with CIL,” the country’s largest coal producing company said in a statement. The discontinued mines awarded to private operators hold an estimated 635 million tonnes (MT) of extractable coal reserves.

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As per a press release, the Ministry of Coal will also launch the 10th round of commercial coal mines auction on June 21, during which mining companies will bid for rights on 60 mines across eight states. Of the total 60, 7 mines from previous rounds are being offered for the second time. “There are no restrictions on the sale or utilisation of coal. Notably, eligibility criteria have been eliminated, removing any technical or financial barriers for participation,” the release said.

Under commercial auctions thus far, a total of 104 coal mines have been auctioned with a cumulative peak rated capacity of 226 MTPA. In 2023-24 (FY24), captive and commercial coal blocks produced 147 MT of coal, and in FY25, the government targets to produce 170 MT. As per internal coal ministry estimates, coal production from these blocks will exceed 380 MT in FY30, with 265 MT meant for the power sector, 17 MT for non-regulated coal-consuming sectors like steel and cement, and 102 MT with no end-use restrictions.

In FY24, India produced 997.4 MT of coal and aims to produce 1,080 MT in the ongoing financial year. In FY24, India’s coal imports increased by 7.7 per cent to 268 MT. Demand for coal has grown considerably over the years, especially from the power sector. “The demand for coal-based power has grown by 7.3 per cent in this financial year (FY) compared to last year in the same period. This is the highest ever demand for coal,” the coal ministry said Wednesday. Currently, coal stocks at thermal power plants are over 45 MT, 32 per cent higher than last year’s 34 MT.

Aggam Walia

Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More

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