Government allows new players in coal auctions
Announces key coal auction amendments. Will this unclog the coal supply chain?
Coal imports likely to rise significantly in coming years. Source - Government of India
In an effort to increase competition and boost both earnings from coal auctions and coal production in the country, the government has announced several amendments. The key change is allowing new companies to participate in coal auctions.
Union Minister of Coal, Mines and Parliamentary Affairs, Pralhad Joshi, informed the parliament that companies without any coal mining experience in India will be eligible to participate in the auction of coal blocks.
Among other changes, the government will provide incentives for early production, gasification and liquefaction of coal, and exploitation of Coal Bed Methane (CBM) will be allowed. Further, there will be no restriction on the sale and/or utilisation of coal.
“Any company selected through auction/ allotment can carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the Central Government, allowing wider participation and competition in auction”, the minister stated.
The government had also launched a Single Window Clearance portal in January 2021 for clearances and approvals required to start a coal mine in India.
The supply of high-quality coal/coking coal (low-ash-coal) is limited in India. Currently, the country imports about one-fourth of its total coal requirement of about 900 million tonnes. The demand for coal is expected to remain in the range of 1.3-1.5 billion tonnes by 2030, according to the latest Economic Survey.
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