Union minister Pralhad Joshi says India will be able to use its coal reserves for just another 20-30 years
A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odisha, Chhattisgarh, and Maharashtra were auctioned in this first tranche
India will be able to use its coal reserves only for “another 20-30 years", Union coal minister Pralhad Joshi said on Monday as he buttressed the country’s green energy credentials.
The statement comes at a time when fossil fuel investments are losing their sheen and the global energy investment landscape is rapidly evolving, with a focus on environmental, social and governance investing.
India has the world’s fourth largest coal reserves and is the second-largest producer of the fuel. The debate on discouraging the use of fossil fuels has also gained traction with US president-elect Joe Biden promising a “clean energy revolution".
Governments of coal-bearing states should cooperate with successful bidders to help expedite the fuel’s production, the minister said at a press conference on the last day of India’s first commercial coal mine auctions that began on 2 November.
“This is the time that there is a huge opportunity for growth," Joshi said.
Sarda Energy and Minerals Ltd won the bid for Gare Palma IV/7 coal mine in Chhattisgarh by quoting the highest ever revenue share or premium over and above the floor price in the first commercial coal mine auctions that ended on Monday, said a government official. The company quoted a revenue share of 66.75% for the mine, which has a total geological reserve of 234.205 million tonnes.
Adani Enterprises Ltd, Bharat Aluminium Company Ltd, Jindal Power Ltd, JSW Steel Ltd, DB Power Ltd, Hindalco Industries Ltd, and Nuvoco Vistas Corporation Ltd were also in the fray for the coal mine.
As part of the two-stage auction process, a bidder has to quote the percentage revenue share over the reserve price. There will be no restriction on the sale and utilization of coal from these mines. Earlier, blocks were allocated to companies on the payment of fixed amounts per tonne.
A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odisha, Chhattisgarh, and Maharashtra were auctioned in this first tranche, with the winning bids quoting a 28% average revenue share or premium over and above the floor price for them. These 19 coal mines have a rated production capacity of 51 million tonnes annually and will help generate for the state governments an annual revenue of around ₹6,636 crore.
Joshi said that the results of these auctions have been historic and clearly proves that opening up the coal sector was a step in the right direction and is propelling the sector on the growth course. “I am confident that commercial mining of coal will help India become ‘Atma Nirbhar’ in coal," he said.
India’s coal requirement is expected to go up to 1,123 million tonnes (mt) by 2023 from the present level of 700 mt. The earlier plan was to mine 1.5 billion tonnes of coal by 2020.
Joshi said that with 19 coal mines being auctioned, it was the highest in any of the 10 tranches offered till date since 2015. A total of 116 coal mines have been offered for auction over the last 10 tranches.
The Indian coal sector has welcomed the move for commercial coal mining and termed it as a message to state-owned monopoly businesses.
“First and foremost, it is a message to state-owned monopolies that now that the government is willing to do business with anyone and everyone, they might as well have a hard look at their efficiency norms and performance parameters," said Sanjay Kumar, director, personnel, at Western Coalfields Ltd, a Coal India Ltd subsidiary.