Union Finance Minister Nirmala Sitharaman launched the biggest-ever coal mine auction of 141 mines that are expected to benefit twelve states directly. During the launch, the finance minister said that a fast-growing economy like India needs greater investment in coal production and gasification projects.
Bank Maha Pack includes Live Batches, Test Series, Video Lectures & eBooks
What Has Been Said:
The Coal Ministry in a statement said that 33 coal mines were put up for auction in the sixth round of commercial auctions, out of which 71 were new coal mines and 62 coal mines were rolling over from earlier tranches of commercial auctions. Additionally, 8 coal mines under the second attempt of 5th round of commercial auctions were included for which single bids were received in the first attempt. “With the launch of this auction tranche, the Ministry of Coal re-affirms its commitment to attaining self-sufficiency in the area of thermal coal,” the ministry said.
Sitharaman said that twelve states are to benefit directly from today’s auctioning of 141 coal mines. The Finance Minister complimented the Coal Ministry for the recent initiatives to unlock the coal sector and said that mining sector reforms are providing the right fillip to our fast-growing economy. Sitharaman highlighted that India is at present the best investment destination in the world. She pointed out that due to policy consistency and the transparent process of the present government, coal imports for the power sector have come down by 41 percent.
Direct Beneficiary States:
The mines being auctioned are spread across coal/lignite-bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu, and Bihar.
About The Coal Sector Reform:
Despite being the world’s fourth-largest producer, India is the second-largest importer of the dry-fuel. Therefore, in line with the vision to build an ‘Atma Nirbhar Bharat’, a slew of reforms to promote commercial mining of coal in India, has been done.
The reforms Recently Announced In Coal Sector:
- Commercial mining of coal is allowed, with 50 blocks to be offered to the private sector.
- Entry norms will be liberalised as it has done away with the regulation requiring power plants to use “washed” coal.
- Coal blocks to be offered to private companies on revenue sharing basis in place of fixed cost.
- Coal gasification/liquefaction to be incentivised through rebate in revenue share.
- Coal bed methane (CBM) extraction rights to be auctioned from Coal India’s coal mines.
The Intended Benefits:
- Plugging Supply Gap: Commercial mining of coal can increase the domestic production of coal and bridge the supply gap.
- Boost Economy and Employment: Allowing commercial mining may help to address India’s coal production needs, provide investment opportunities and save precious foreign exchange.
- This will play a major role in ensuring the energy security of the country, as nearly the majority of power generation in India comes from thermal power plants. The domino effect on sectors that use coal, like steel, power and aluminium, is going to be significant.