Coal ministry holds meet to woo investments in commercial mining

The coal ministry has launched largest ever coal block auctioning for the sixth tranche of commercial coal mine auction on November 3, in which 141 coal mines are put on for offer

investors' meet coal mining

Bengaluru: The ministry of coal and the ministry of mines jointly held an investors’ conclave on commercial coal mines auction and opportunities in mining sector here on December 3 in the midst of ongoing bidding process for the 6th trenches of coal mines.

Union minister of coal and mines Prahlad Joshi chaired the event, which was attended by Karnataka chief minister Basavaraj Somappa Bommai and the state’s mines & geology minister Halappa Basappa Achar. Union coal secretary Amrit Lal Meena was also present.

The coal ministry has launched largest ever coal block auctioning for the sixth tranche of commercial coal mine auction on November 03, in which 141 coal mines are put on for offer including eight coal mines under 2nd attempt of 5th tranche.

Additional secretary, coal ministry, M Nagaraju welcomed all the investors and informed the forum about the coal reforms undertaken by the coal ministry to improve the attractiveness of the coal auction process and make it more investor friendly. Sanjay Lohiya, additional secretary, ministry of mines highlighted that after the reforms brought in minerals sector in March 2021, the pace of exploration has increased.

“Since reforms brought in March last year, 108 mineral blocks have been auctioned as compared to 108 blocks auctioned in 6 years from 2015 to 2021. Further, auction of 70 blocks is under process in the country. Further, the Geological Survey of India (GSI) has handed over more than 200 explored blocks to state governments for auction. As such, more than 400 blocks are ready for auction in the country,” added Lohiya.

Also Read: Centre launches biggest coal mining auction; 11 states to benefit

Joshi emphasised on the importance of coal in securing energy security for the future of the country. He also assured the investors that the future outlook of the coal is positive, and the ministry is undertaking various reforms for ease of doing business in the coal sector. He stated that the current contribution of the mining sector in the country’s GDP is 0.9% and submitted that the Prime Minister has the vision to enhance this contribution to 2.5% by 2030, indicating that there is a huge potential in the mining sector and the investors are invited to participate in this opportunity.

Biggest coal mining auction

Karnataka CM Bommai pointed out the importance of sustainable mining for maintaining balanced eco system and better future of the country. “As per the Indian belief, whole cosmos is made of 5 elements. We are also made of these 5 elements. Future of mankind is dependent on how best we utilise these elements. Mother Earth is one of the elements which also gives us rich mineral resources. We are required to achieve sustainable mining. We have to adopt best mining culture to bring productivity and sustainability,” said the CM.

Also Read: Coal Ministry seeks to enhance production to 1.23BT by 2024-25

Amrit Lal Meena, coal secretary, said that the requirement of various sectors in the country depends heavily on power and for that coal needs to be commercially explored. Reiterated commitment of the ministry towards supporting the coal industry, Meena said that he would extend any help required by the prospective bidders.

Coal mine planning and design institute (CMPDI) general manager Chiranjib Patra gave a presentation on the technical details of the coal blocks being offered in the largest ever auction process, also presented the investment opportunities in the mine developer and operator sector. Shubham Goel, vice president, SBI Capital Markets, delivered a presentation on the terms and conditions of the auction process and investors perspective on commercial coal mining in the country.

Also Read: Coal production to start from 4 mines in Jharkhand soon

Key features of the auction process include reduction in upfront amount and bid security amount, permission to relinquish part of the coal mine in case of partially explored coal mines, introduction of national coal index and national lignite index, ease of participation with no entry barriers, full flexibility in coal utilisation, optimized payment structures, efficiency promotion through incentives for early production and use of clean coal technology.

The sale of tender document commenced on November 03 and details of the mines, auction terms, timelines etc. can be accessed on MSTC auction platform. The auction shall be held online through a transparent 2 stage process, on the basis of percentage revenue share, the investors were told.

Also Read: Coal production up by 29% during April amidst power crisis

Pankaj Pandey, secretary, department of mines & geology, Karnataka, gave presentation on the ongoing mineral blocks auctions in Karnataka and steps taken by the state gvernment in simplifying the application and approval process for the investors. Karnata government has auctioned 34 mineral blocks (5 CL and 29 ML), second highest after Odisha, which has auctioned 40 blocks. Out of 34 auctioned blocks, 11 have started production. Further, 25 potentials blocks have been identified that will be auctioned shortly.

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