In a bid to increase domestic coal output, Centre to auction 60 coal blocks today

In a bid to increase the coal production in India, the Union Minister of Coal and Mines G Kishan Reddy will launch the 10th round of the commercial coal block auction on Friday.According to a statement by the Union Ministry of Coal, in this round of coal auction, 60 blocks will be offered.

The Coal India Limited (CIL) had previously awarded 23 coal mines to private sector bidders under a revenue-sharing model, aiming to exploit the latent coal reserves in some of its closed and discontinued underground mines.

The coal mines in the 10th round of allocation are located in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Telangana and West Bengal. 

Sixteen mines will be offered in Odisha, followed by Chattisgarh and Madhya Pradesh where 15 coal mines will be auctioned.According to the Ministry of Coal, so far it has allocated/ auctioned 161 coal mines with peak rated capacity of 575 MT. 

Out of which 58 mines have received mine opening permission and 54 mines are into operation. 

Last year these mines have produced total of 147 MT of coal, which constitutes 15 per cent of the total coal production of the countryThe Commercial coal block auction was launched by the Prime Minister in 2020. 

Since then, the Ministry has successfully auctioned 107 coal blocks during the last nine rounds. 

So far, 11 commercial coal blocks have been operationalized in the country.On the 23 coal mines given to the private bidders Coal India said "The cumulative peak rated capacity of these mines is 34.14 million tonnes/year (MT/Y) while the total extractable reserves are estimated at 635 MT".

Coal India identified 34 discontinued mines with dormant good-quality coal reserves that were not financially viable for the company to mine.

As a result, CIL decided to tender and offer these mines to willing private sector players who could operate them, produce the dry fuel, and share parts of the revenue with CIL.

The successful bidder would be the one offering the maximum revenue to the company. 

"The minimum revenue to be shared is 4 per cent. The contract period is for a maximum of 25 years," the company stated.

The company added that this move is advantageous in several ways, including resource conservation, effective substitution of imported coal for the non-regulated sector, and providing livelihoods to local communities where these mines are revived. 

Environmentally, there would be no land degradation as the mining infrastructure is already in place.CIL is also identifying additional mines to attract wider participation, with relaxed bid norms.

For coal sold exclusively for coal gasification or coal liquefaction, 50 per cent of the contracted percentage of revenue share will be provided to the operator.

Coal India said that the successful bidder or mine operator will take over the mine on an "as is where is" basis and can use the existing infrastructure and project facilities without additional payment to Coal India.

In case of a consortium, foreign bidders are allowed to participate as the second or third members, according to the Government e-Marketplace (GeM) portal. 

The mine operator will act as the agency responsible for selling coal mined from these mines at market-driven prices through an auction process on behalf of the authority. 

They will have the freedom to choose their preferred technology and deploy mining machinery to extract coal from the mines.

Of the 34 identified mines, West Bengal-based Eastern Coalfields Limited and Jharkhand-based Bharat Coking Coal Limited account for 10 each. 

Western Coalfields Limited has 5, South Eastern Coalfields Limited has 4, Mahanadi Coalfields Limited has 3, and Central Coalfields Limited has 2.