Centre to auction another 50 commercial coal blocks in FY25

Since the opening up of the coal mining sector 107 blocks have been auctioned.
Since the opening up of the coal mining sector 107 blocks have been auctioned.

Summary

  • In the 10th round, the ministry has already offered 67 blocks and this round is expected to be completed by November. After this, the ministry plans to launch the 11th round with over 50 coal blocks put on offer.

New Delhi: The Union ministry of coal is likely to offer more than 50 coal blocks for commercial coal auctions in the current financial year.

In the 10th round, the ministry has already offered 67 blocks and this round is expected to complete by November. After this, the ministry plans to launch the 11th round with over 50 coal blocks on offer, said two people aware of the plan.

"The 10th round of auction is on. We expect the round to conclude by November. In this round around 15-20 blocks are expected to be auctioned out. Immediately after the round is completed, the ministry will come out with the next round which also is expected to conclude within this fiscal," one of the people mentioned above.

Dependent on interest

Another person said the number of blocks to be offered in the upcoming round would depend upon the interest received in the 10th round and the blocks auctioned out.

"Offering also depends upon how many blocks are taken over by buyers in the 10th round. However, it must be over 50 blocks," the person said.

Since the opening up of the coal mining sector for commercial mining by private players in 2020, a total of 107 blocks have been auctioned with a 256 million tonnes of peak rated capacity and about 11 of these mines have become operational so far.

Also read | Government targets 186.6 MT of commercial coal production in FY25

Captive and commercial coal blocks produced 147 million tonnes coal in the last fiscal (FY24), registering a year-on-year growth of 27% compared to FY23.

For FY25, the ministry has targeted 186.63 million tonnes (MT) of production from these captive and commercial coal mines, and in January it said that plans were in place for production to be increased to 225.69 MT during FY26, with an eventual target of 383.56 MT by FY30.

Key role in helping India

Commercial coal mines are expected to play a key role in helping India achieve the target of ending imports of coal for power generation by FY26. The government aims to take annual coal production to 1.5 million tonne by FY30.

In the previous fiscal, coal production touched a new high of 997.4 million tonnes, marking an 11.67% increase from FY23. For this year (FY25), the Centre has set a target of 1.08 billion tonnes.

Also read | Vedanta, Coal India, Ola Electric bid for critical mineral blocks

These auctions of commercial mines are a key mode of asset monetization for the coal ministry.

On 1 April, Mint reported that the coal ministry is targeting a monetization of assets worth about ₹54,721 crore in FY25, about 9% higher than ₹50,118 crore target in FY24. About ₹45,000 crore is expected to come from the auction of commercial mines.

Queries sent to the ministry of coal remained unanswered till press time.

Attracting investors

In the wake of weakening investor interest after initial enthusiasm among miners, over the past one year the ministry has taken up a number measures to make the mines more attractive for private investors. Last year, the ministry for the first time carried out ground verification of coal blocks ahead of commercial auctions in a bid to attract investors.

Based on such surveys, blocks are modified, with large ones bifurcated and offered as separate blocks.

Also read | Centre evaluates setting up separate regulator for coal exchange

In a bid to attract investor interest, the Centre has largely kept the requirements liberal with no restriction on utilization of coal, whether for captive consumption or commercial purposes, and has reduced the upfront payable amount among other relaxations.

The government also gives a 50% rebate on the final offer if the quantity of coal under the terms of purchase is produced earlier than the scheduled date.

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