India expected to start auction of commercial coal mines shortly

The government of India may start the process of commercial coal mine auction once it receives public feedback on the discussion paper floated by the coal ministry.  These mines will not be restricted to any particular end use of the coal. The private miners will be able to manage production, pricing and marketing strategy of the allotted mines independently.

“We have recently put out a draft on commercial mining of coal on the website and invited public comments. Once we receive public comments (we will auction these coal blocks for commercial mining). We have also almost identified the coal blocks for the purpose,” Power, Coal, Mines and New and Renewable Energy Minister Piyush Goyal told reporters at a conference of coal quality.

Goyal further said, “There will be big as well as small blocks for commercial mining of coal. There will be a mixture because every block has its own utility.”

The government has requested public and other stakeholders to submit their comments and suggestions on the draft proposal by April 26.

He says that the starting of auction “will depend on the public comments received on the discussion paper. However, we have planned to do it this financial year only.”

Earlier, a group of secretaries suggested that the government should create competition for the state-owned Coal India Ltd (CIL) by opening commercial coal mining. The auction will start with 2-3 large mines with peak rated capacity of around 30 million tonnes per annum.

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The bidders should hold tangible net wealth of not less than INR 1,500 crore and should have experience of handling at least 25 million cubic metre of excavation in the last three years. The proposal also allows formation of joint ventures by private bidders to meet the eligibility criteria.

The ministry further says the coal imports have already come down by 60 per cent and will be zero by 2017-18.