Lok Sabha Question No. 149 (STARRED), answered on 2021-12-08
Subject: Auction of Coal Blocks
Ministry: COAL
Asked by: Sarmistha Sethi

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK SABHA STARRED QUESTION NO - 149

TO BE ANSWERED ON 08.12.2021

## AUCTION OF COAL BLOCKS

## *149. SHRIMATI SARMISTHA SETHI:

Will the Minister of COAL be pleased to state:

- (a)  whether  the  Government  has  recently  devised  an  action  plan  to  auction  coal  blocks  to address the requirements of dry fuel in downstream sectors;
- (b) if so, the details thereof;
- (c) the details of its impact on the mine bearing States;
- (d) whether the Government is working on a plan for privatizing coal mining in the country; and
- (e) if so, the details thereof and the reasons therefor?

## ANSWER

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

(a) to (e): A statement is laid on the Table of the House.

## Statement referred to in reply to parts (a) to (e) of Lok Sabha Starred Question No. 149 for answer on 08.12.2021 asked by Shrimati Sarmistha Sethi regarding Auction of Coal Blocks.

(a) and (b): Methodology for auction of coal and lignite mines/blocks for sale of coal/lignite on  revenue  sharing  basis  was  issued  on  28.05.2020  and  modified  vide  order  dated 24.11.2021. Salient features of the Methodology are as under:

-  Based on Revenue sharing mechanism. Floor percentage at 4%.
-  Applicable to fully explored as well as partially explored coal blocks.
-  Upfront amount is based on value of estimated geological reserves.
-  Successful Bidder to pay monthly revenue share based on percentage of revenue share quoted, total quantity of coal and notional or actual price whichever is higher.
-  Incentives for early production, gasification and liquefaction of coal.
-  Exploitation of CBM is allowed.
-  No  restriction  on  the  sale  and/  or  utilisation  of  coal.  More  flexibility  in  coal production schedule.

Auction  for  coal  blocks  for  sale  of  coal would  make  maximum  coal  available  in  the market at the earliest which will also help in meeting the requirement of coal in downstream sectors.

(c):  Entire  revenue  regenerated  from  allocation  of  coal  mines  would  accrue  to  the  coal bearing states which can be utilised for the growth and development of those states.

(d) & (e): Methodology for auction of coal and lignite mines / blocks for sale of coal / lignite on  revenue  sharing basis  was  issued  on  28.05.2020  and  modified  vide  order  dated 24.11.2021. There is no plan to privatize existing coal mines. However, in the auction of new coal  mines,  both  Government  and  Private  Companies  are  eligible  to  participate  in  their auction  of  coal  mines  for  sale  and/or  consumption  of  coal. So  far,  28  coal  mines  have been successfully auctioned for sale of coal. Out of these 28 coal mines, 27 coal mines have been auctioned to private companies. Auction process for 88 coal mines is underway.

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. Auction of coal mines for sale of coal in a transparent manner is expected to encourage transparent pricing of coal, based on market forces.

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