Lok Sabha Question No. 1824 (UNSTARRED), answered on 2020-09-21
Subject: Commercial Coal Mining
Ministry: COAL
Asked by: John Barla, Ravi Kishan Shukla, Arun Sao, Sangamlal Kadedin Gupta, Ravindra Kushawaha

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK SABHA

## UNSTARRED QUESTION NO - 1824

TO BE ANSWERED ON 21.09.2020

## Commercial Coal Mining

## 1824.  SHRI JOHN BARLA:

SHRI RAVI KISHAN:

SHRI RAVINDRA KUSHWAHA:

SHRI ARUN SAO:

SHRI SANGAM LAL GUPTA:

Will the Minister of COAL be pleased to state:

- (a)  whether  the  Government  has  decided  to  open  the  coal  sector  for  private  domestic  and international commercial mining and if so, the details thereof;

(b) whether the right of State owned Coal India Limited are not likely to be violated as a result of the said decision and if so, the reaction of the Government thereto;

(c) the benefit likely to be accrued to Coal sector as a result of this decision;

(d) whether the said decision of the Government is likely to reduce the import of expensive coal and if so, the details thereof; and

(e)  the  details  of  number  of  coal  blocks  auctioned  under  South  Eastern  Coalfields  Limited (SFCL)?

## ANSWER

## MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI)

(a):  Yes,  please. Methodology for auction of coal and lignite mines / blocks for sale of coal / lignite  on  revenue  sharing  basis has  been approved  and  order  issued  on  28.05.2020. Salient features of the methodology are as under:

-  Bidders  would  be  required  to  bid  for  a  percentage  share  of  revenue  which  would  be payable to the State Government.
-  Applicable to fully explored as well as partially explored coal blocks under the CMSP Act and MMDR Act.
-  Upfront amount is based on value of estimated geological reserves.
-  Successful bidder shall be provided incentives for early production and for gasification or liquefaction of coal.
-  Exploitation of Coal Bed Methane (CBM) is allowed.
-  There shall be no restriction on the sale and/or utilisation of coal from the coal mine.
-  Provides for relinquishment of coal block by the successful bidder of partially explored coal mine.

Further,  Government  reviewed  the  Foreign  Direct  Investment  (FDI)  policy  in  the  coal mining on 18.09.2019 allowing 100% FDI under automatic route for sale of coal, coal mining activities  including  associated  processing  infrastructure  subject  to  the  provisions  of the  CMSP Act and the MMDR Act as amended from time to time and other relevant Acts on the subject. Associated  Processing  Infrastructure  includes  coal  washery,  coal  handling  and  separation (magnetic and non-magnetic).

Auction process for commercial coal mining has already started. Directions of the Central Government were issued to the Nominated Authority for conducting auction of 38 coal mines for sale of coal under the provisions of the CMSP Act and the MMDR Act. After completion of all the necessary processes, Commercial Mining was launched on 18.06.2020.

(b): Coal Blocks, whose allotments  were canceled by Hon Supreme Court in year 2014 ( Blocks under   CMSP  Acts)  and  new  blocks  identified  under  MMDR  Act  and   CBA  Rules  2017  are proposed to be allocated for the commercial mining hence CIL is not to be affected.

(c):  Auction of coal mines for sale of coal would create a market place for coal with multiple producers  to  drive  competition  and  adopt  best  practices  in  mining  as  well  as  environment management. The auction of coal mines for sale of coal in a transparent manner is expected to encourage transparent pricing of coal, based on the market forces. It would make maximum coal available in the market at the earliest. Auction of coal mines for sale of coal is expected to bring efficiency  in  the  coal  sector  due  to  increased  competition  and  deployment  of   best  possible technology including by Coal India Limited (CIL) and its subsidiaries.

(d): Auction of coal mines for sale of coal would make maximum coal available in the market at the earliest.  It  is  expected that availability of more coal in the market would reduce import of coal.

(e):  As  replied  in  part  (b)  of  the  question  above,  none  of  the  Coal  blocks  of  South  Eastern Coalfields Limited are being auctioned.

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