To further enhance participation in commercial auction of coal mines, Ministry of Coal is planning to conduct a series of investors’ conclave at several locations across India.
It has already organized such conclaves at Indore and Mumbai which saw very good participation from the prospective bidders indicating the enthusiasm among bidders regarding the ongoing commercial coal mines auction.
During the recently concluded investor conclave on December 01, 2022, in Mumbai, Ministry of Coal stated the successful auction of hundreds of coal mines.
Reforms in the Coal Mining Sector
Additional Secretary M. Nagaraju informed the forum about the coal reforms undertaken by Ministry of Coal to improve the attractiveness of the coal auction process and make it more investor friendly.
Shri Vivek Bharadwaj, Secretary, Mines, emphasized on exploration and production of minerals beyond iron ore, coal, bauxite and limestone.
He emphasized on exploration of critical minerals such as palladium, tantalum and lithium etc., which are used in electronics, telecommunication and green energy.
More than 70% power is generated by Coal
He informed that while ~70% of the power is generated through coal in India, the ministry has also taken various initiatives to reduce carbon footprint considering the environmental impact of coal mining.
Shri Pralhad Joshi reaffirmed that the usage of coal is going to stay at least for the next 25-30 years and that India is currently having very low per capita consumption of power as compared to some of the other developed economies in the world and it is estimated that the per capita consumption is going to double by 2040 for which coal is the necessity.
The focus of the present government under the guidance of Prime Minister, Shri Narendra Modi is to become net zero carbon emission country by adopting better technological processes.
Key features of the Auction Process
Shri Raosaheb Patil Danve stated that the Ministry of Coal has transformed the entire auction process of coal mines under the guidance of Prime Minister, Shri Narendra Modi.
Key features of the auction process include reduction in upfront amount and bid security amount, permission to relinquish part of the coal mine in case of partially explored coal mines, introduction of National Coal Index and National Lignite Index, ease of participation with no entry barriers, full flexibility in coal utilisation, optimized payment structures, efficiency promotion through incentives for early production and use of clean coal technology.
The sale of tender document commenced on November 03, 2022. Details of the mines, auction terms, timelines etc. can be accessed on MSTC auction platform.
The auction shall be held online through a transparent 2 stage process, on the basis of Percentage Revenue Share.
SBI Capital Markets Limited, the sole Transaction Advisor to Ministry of Coal for the commercial coal mine auctions, is assisting the Ministry of Coal in conduct of the auction.
Reforms in mineral Sector and its Significance
Subsequently, Dr. Veena Kumari Dermal, Joint Secretary, Ministry of Mines gave a brief presentation on reforms in mineral sector which has brought in ease of doing business and transparency that helped in increase in mineral production and revenue generation to States.
Further, she has informed that India is a 5th largest economy in the world whereas contribution of mineral sector in the GDP of india is only 2.67%. She also informed that 6.88 Lakh sq. Km OGP area has been covered as of 2020.
India is currently producing 95 minerals and is second largest producer of coal and crude steel and 4th largest producer of iron ore.
Major Mining Reforms through MMDR Act 2015
She has informed about the major mining reforms that has been brought in MMDR Amendment Act, 2015 that mandates grant of mineral concession through e-auction to improve transparency and setting up of DMF and contribution to NMET.
She also informed about the major reforms brought through the MMDR Amendment Act, 2021, that, inter-alia, includes auction of miner al blocks without end use restrictions and allowed transfer of all ML & CL without any charges and transfer of valid clearances.
Further, She has informed that so far, total 216 major mineral blocks including 168 MLs and 48 CL have been auctioned in 10 States, since introduction of auction regime in 2015. Currently, 68 NITs for different minerals are at different stages of auction in various states.
During the discussions, Secretary (Mines) assured the investors that the Ministry of Mines will provide all the possible support and cooperation.