India’s 9 Commercial Coal Mines Set to Shine by FY24-End

Govt Expects 9 Commercial Coal Mines to Start Operations by the End of Fiscal Year 2023-24

Before the end of the current financial year, 9 commercial coal mines are expected to be operational, according to the Coal Ministry.

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Currently, 6 commercial coal mines have commenced production, and 3 more are anticipated to begin production in the coming months.

ALSO, READ / India Achieves Record Coal Production: Q1 FY 2023-24…

This progress stems from the Commercial Coal Mine Auction initiated by the Ministry of Coal 3 years ago, with 91 mines successfully auctioned thus far.

Typically, it takes 4 to 5 years to operationalize a coal mine, as per industry experts. The government has conducted seven rounds of commercial coal mine auctions, with the 8th round currently underway and the 9th tranche launched in December 2023, offering 31 coal mines across 4 states.

In a separate announcement, the Ministry of Coal highlighted the substantial industry response to the ongoing 8th round of commercial coal mine auctions.

The ministry stated that the industry’s robust interest is evident from numerous queries and site visit requests received from bidders. This reflects the industry’s confidence in the transparent commercial coal auction regime initiated by the PM in June 2020.

The 8th round, launched on November 15, 2023, has witnessed active participation, with over 50 bidders attending the pre-bid meeting held on December 12, 2023.

The submission deadline for bids is January 29, and the bids will be opened on January 30, 2024.

The 8th round offers 39 coal mines, with a cumulative peak rated capacity of approximately 77 million tonnes, and an additional four mines from the second attempt of the 7th round with a cumulative peak rated capacity of 30 million tonnes.

The ministry estimates that coal mining from the already auctioned mines will generate an annual revenue of Rs 33,343 crore, considering production at an aggregated Peak Rate Capacity level of 220.90 million tonnes per annum.

What Is Aggregated Peak Rate Capacity (PRC)?

In simple terms, it’s a fancy way of saying the maximum amount of coal a mine can produce in a year, typically measured in million tonnes per annum (MTPA).

PRC plays a crucial role in deciding how much revenue and upfront payment the Government of India receives when auctioning coal mines or blocks through the commercial mining scheme.
Additionally, the PRC gives insights into the potential job creation and investment needed to make these coal mines or blocks operational.

This is important because it influences how much money the government gets when they auction off coal mines.

For example, let’s take 10 coal mines recently auctioned. Together, they can produce up to 10.39 million tons of coal each year.
This translates to around Rs.1077.67 crore in revenue for the states.
These mines are also expected to create around 14,047 jobs and attract an investment of about Rs.1558.50 crore.
So, the PRC is not just about coal production; it’s tied to money, jobs, and investments too!

Upon full operation, these mines are expected to create employment for around three lakh individuals, both directly and indirectly.

Commercial coal mining is anticipated to attract new investments to the country, and the entire revenue from the auctions will be allocated to the coal-bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Arunachal Pradesh, Bihar, and Assam.