Coal blocks auction: Push for ease of doing mining

Sumit Maitra

With a vision that beaten down economy could be revived by giving a hard push to the mining sector and triggering ripples down the industrial value-chain, the government has now gone for the second phase of the economic stimulus process by kick-starting the first phase of commercial coal mine auctions on June 18 involving auction process of 41 coal blocks for commercial mining to private sector.

While several resource rich countries like China, Indonesia and also US, to some extent, focused the power sector in their post-Covid economic stimulus packages, India focused on opening up the mining sector, the start point of the industrial and manufacturing processes.

The auctioning is part of the series of announcements made under the Atmanirbhar Bharat initiative with an aim that India is expected to save around `30,000 crore annually on import bill of thermal coal once commercial mining from these mines pick up.

“Atmanirbhar Bharat means India doesn’t need to import coal and can use that money to spend on social welfare. Whatever we import now, we would be exporting them. We will take each and every product and service and work holistically to make India self-reliant on every such sector,” the Prime Minister Narendra Modi said during the event.

“We are also taking coal sector out of the impact of the lockdown as well. A country which is part of the largest producers of coal with fourth largest coal reserve should be the largest exporter as well,” he added.

“For India importing coal is a sin,” coal minister Pralhad Joshi said at the event inaugurated by the Prime Minister where coal ministry officials and industry representatives like FICCI President Sangeetha Reddy, Chairman of Vedanta Group Anil Agarwal and Tata Sons Chairman N. Chandrasekharan highlighted and appreciated the move.

Speaking on the occasion, the Prime Minister said the government was focusing on achieving self-reliance, not only in coal and the energy sector, but in the economy as a whole.

“To achieve this, each sector, each product, each service, should be kept in mind and worked holistically, to make India self-reliant in the particular area. A major step taken today will make India self-reliant in the energy sector. This event marks not only the implementation of reforms concerning one coal mining sector but also marks the beginning of lakhs of employment opportunities for the youth. We are not only launching the auction of commercial coal mining today but also freeing the coal sector from decades of lockdown,” Modi said.

The Prime Minister also said that the steps taken towards commercial mining will be very helpful to eastern and central India by providing the local population with employment near their homes. He said that the Government has taken a decision to spend Rs 50,000 crore on creating infrastructure for coal extraction and transportation, which will also create employment opportunities.

He further said that the government has set a target to gasify around 100 million tons (mt) coal by 2030 and four projects have been identified for this purpose and around Rs 20,000 crore will be invested.

All these steps are expected to create employment generation for more than 2.8 lakh people – direct employment to approximately 70,000 people and indirect employment to approximately 2,10,000 people, as per the government.

During the day of the launch event in New Delhi, the government floated notice inviting tender for 41 blocks which include 33 blocks under CM(SP) Act and 8 blocks under MMDR Act.

The notification for the 11th tranche of auction under CM(SP) Act and 1st tranche of auction under MMDR Act of identified coal mines/blocks was issued in exercise of the powers conferred by Section 4(1) and 4(2) of the Coal Mines (Special Provisions) Act, 2015 and Section 11A of the Mines and Minerals (Development and Regulation) Act, 1957 and in accordance with the Rule 8(2) of the Coal Mines (Special Provisions) Rules 2014 and the Rule 3(1) of the Coal Blocks Allocation Rules, 2017.

The last date for purchase of tender has been fixed at August 14, while the last date for submission of bids on MSTC website is August 18.

“These 41 mines upon attainment of peak production capacity of 225 million tons will account for around 15 percent of India’s total coal production in 2025-26. Also, the implementation of a National Coal Index will help India move towards a free market structure for coal,” said Care Ratings.