PM Modi To Launch Auction Of Commercial Mining On Thursday; 41 Coal Blocks To Be Put On Sale
Prime Minister Narendra Modi will on Thursday launch the auction of coal mines for commercial mining via video conferencing at an event in New Delhi.
As many as 41 coal blocks will be put up on sale for commercial mining, according to sources.
The virtual auction event will be centred on the theme "Unleashing coal: New hopes for Aatmanirbhar Bharat", the coal ministry said.
Coal Minister Pralhad Joshi had earlier said that by allowing commercial mining, the government has completely opened up the sector for investments.
Terming the commercial coal mining as one of the biggest-ever reforms in the sector to boost ease of doing business, the minister had said several restrictions have also been removed, promoting free trade of coal.
As India has recently embraced the Aatma Nirbhar Bharat Abhiyan, the coal and mining sector has started gearing up to make the country self-reliant in coal mining through structural reforms, according to the coal ministry.
The commercial coal mining auction is completely different from the earlier regime of restricted sectors, use and price.
Now there are no such restrictions at all.
The proposed auction has business-friendly terms and conditions, including reduced upfront amount, adjustment of upfront amount against royalty and liberal efficiency parameters to encourage flexibility to operationalise the coal mines.
Besides, 100% FDI through automatic route has been allowed and there are reasonable financial terms and revenue sharing model based on National Coal Index.
The successful bidders will also have flexibility in coal production unlike the past and have provision for incentives for early production and coal gasification.
The mines to be put on auction would be in three categories -- small, medium and large.
Some of the mines would come into production within a year of being auctioned, a source had earlier said.
The government had last month approved a methodology for commercial mining of coal on revenue sharing basis.
The decision was taken during a meeting of the Cabinet Committee on Economic Affairs , chaired by the Prime Minister.
Finance Minister Nirmala Sitharaman, while announcing the stimulus package for the coronavirus-hit economy last month, had said coal mines would be auctioned to the private sector for commercial mining to end reliance on imports and improve local production.
The methodology approved by the CCEA provides that bid parameter will be revenue share, the government had said, adding that bidders would be required to bid for a percentage share of revenue payable to the government.