India to offer 10 coal blocks to private investors

03 October 2017 Week 39 Issue 427

The Indian Coal Ministry has identified 10 coal blocks to offer to private investors to develop on a commercial basis.


“We are opening up the coal mining to the private investors. The coal blocks will be offered to the investors for commercial mining soon,” said the country’s coal minister Piyush Goyal.

The blocks to be offered are: Chendipada, Chendipada-II, Mahanadi and Machhakata in Odisha State; Shankarpur Bhatgaon II Extension, Durgapur II/Taraimar, Durgapur II/Sariya and Madanpur-North in Chattisgarh State; Dongri Tal-II in Madhya Pradesh State and Mednirai in Jharkhand State.

It is estimated that Chendipada and Machhakata have 1.24 billion tonnes and 474.34 million tonnes of extractable reserves respectively, while Shankarpur Bhatgaon II Extension and Mednirai hold 80.14 million tonnes and 80.832 million tonnes.

The ministry will offer the coal blocks to the private investors through a competitive bidding route. A model tender document has been prepared for the award.

The coal blocks are to be awarded in accordance with the Coal Mines Special Provisions Act 2015, which put end to the monopoly of state-run companies such as Coal India Limited (CIL) and Singareni Collieries Co. Limited in mining the coal assets in the country.

The new act allows commercial mining of coal blocks by registered Indian and foreign companies.

Until now, the coal blocks are allocated to the private companies for captive purpose.

“The participation of private investors in commercial coal mining will not only bring in competition but efficient mining in the Indian coal sector, which will ultimately the price of coal,” the minister said.

Private investors are expected to address the issues the mining industry is facing in terms of production, quality, beneficiation of lower grades, transportation, environmental impacts (both from mining of coal and burning of coal).

Coal secretary Susheel Kumar earlier said that sustainable and efficient mining, not revenue maximisation, was the primary objective to promote commercial coal mining in the country.

In 2016, the ministry planned to award some coal blocks to private investors but deferred it owing to a slowdown in coal sales.

The coal ministry is encouraging private investment in coal mining to meet growing demand for high calorific value coal and to tap vast potential coal reserves in India, which are estimated to be over 300 billion tonnes.

Edited by

Richard Lockhart


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