Prime Minister Narendra Modi will on June 18 launch the auction of coal mines for commercial mining at an event here via video conferencing.
The launch of auction will be with the theme “Unleashing coal: New hopes for Atma Nirbhar Bharat”, the coal ministry said in a statement.
“We are launching first-ever commercial coal auctions in country on 18th June. Event will be graced by PM @NarendraModi Ji. It is his vision & guidance to make #AtmaNirbharBharat in coal. I am proud that we are well on our way to achieve it,” Coal Minister Pralhad Joshi said in a tweet.
As India recently adopted Atma Nirbhar Bharat Abhiyan, the coal and mining sector has begun to concentrate on making the country self-reliant in coal mining through structural reforms, the Ministry said.
Commercial coal mining auctions are entirely different from the previous restricted market, usage and price regime. There are no such restrictions at all now.
The proposed auction has business-friendly terms and conditions, including a reduced upfront amount, an upfront adjustment to royalties and liberal efficiency parameters to encourage flexibility in the operation of coal mines.
In addition, 100 % FDI over the automatic route has been allowed and there are reasonable financial terms and revenue sharing models based on the National Coal Index.
Successful bidders will also have flexibility in coal production, unlike in the past, and provide incentives for early production and coal gasification.
Approximately 50 coal blocks are likely to be auctioned for commercial coal mining, a source said earlier.
The mines to be auctioned would be in three categories — small , medium and large. Some of the mines would come into production within a year of being auctioned, the source added.
Last month , the government approved a revenue-sharing methodology for commercial coal mining.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.
Finance Minister Nirmala Sitharaman, while announcing a stimulus package for the coronavirus-hit economy, said that coal mines would be auctioned off to the private sector for commercial mining in order to end dependence on imports and improve local production.
The methodology approved by CCEA provides that the 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.
